Are you still suffering through the manual cash application process? If so, it’s time to step up your game. The manual cash process means that your company still gets checks sent directly to the office or, if you are using a lock box, you receive copies of the checks sent from the bank. This process is complicated by all the other forms of payment your company accepts, such as credit cards and PayPal. When working with JD Edwards, the best solution is to automate the entire process.
Instead of receiving paper copies of checks or a report of remittances, the bank and credit card companies transfer a file that is then picked up in JDE and processed through automatic payment application algorithms. These algorithms are sophisticated enough to allow control over how receipts are matched to invoices and whether or not you apply unapplied cash to a customer’s account. The precision of the match is controlled by the algorithm and can be configured for a range of options from specific invoices and amounts to matching on a balance forward. Small differences can be written off automatically based on company policy so your staff is not bogged down manually clearing small hanging balances.
Utilizing the automated cash applications feature is much more efficient than the manual process, as those employees who were manually entering information for cash application are now free to focus on discrepancy resolutions and collections. If the process is configured correctly, it is more accurate than a manual process. In addition, when using a lock box for cash payments, the lock box gets the cash into your bank account sooner than receiving payments at the office.
Clients who have implemented automatic cash application typically see match rates in the 75% to 80% range. Some have experienced match rates as high as 95% with changes to their invoice and lock box processes geared towards incenting customers to provide invoice information on their remittances to improve the matching process.
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