If the complexity of your organization’s cash application process is more complex, you are not alone.
Fifty percent of attendees surveyed during an Institute of Finance and Management (IOFM) webinar sponsored by Creditron said that the complexity of their cash application process is significantly more complex (11 percent) or slightly more complex (39 percent) compared to two years ago.
And while one-third of the webinar participants said that the complexity of their organization’s cash application process is unchanged compared to two years ago, it is a safe bet that many of those organizations were already dealing with incredibly complex cash application processes.
Attendees blamed several factors for the complexity of their cash application processes, including incorrect and incomplete remittance data, the growing number of payment types and remittance delivery channels, short payments, over-payments and duplicate payments, and a lack of automation.
The bottom line is that 71 percent of the attendees must manually apply most of their receivables. Twenty-nine percent of attendees manually apply all the receivables their organization receives!
Attendees have deployed several technologies to address the low percentage of receivables their organization can apply straight-through, without human operator intervention. These include:
- Bank or third-party lockbox services (used by 76 percent of attendees)
- Electronic invoicing (56 percent)
- Cash application software (51 percent)
- An in-house remittance system (39 percent)
- An online bill-pay service (34 percent)
- Optical character recognition (OCR) software (24 percent)
- Remote deposit capture software (20 percent)
The problem is that none of these technologies adequately address the four biggest contributors to low rates of straight-through processing: diversifying remittance information delivery channels, new payment types, increasing information capture demands, and heightened regulatory requirements.
To address these issues, organizations must change the rules of cash application.
Want to learn how?
E-mail me at firstname.lastname@example.org and I will send you a recording of IOFM’s webinar sponsored by Creditron. I also can arrange an online demonstration of our cash application software.
You are not alone. As one webinar attendee wrote, “It is good to know that other organizations are struggling with the same cash application problems.”