Turn cash confusion into clarity

Cash application in accounts receivable is the process in which incoming payments from customers are matched to their outstanding invoices. When a customer pays for goods or services, an accounts receivable team must identify which invoices are being paid, match the payment to the correct invoices, apply the payment in an accounting system to mark those invoices as paid, and address any discrepancies, such as underpayments, overpayments, or payments that couldn’t be easily matched to invoices for some reason, such as missing invoice numbers or unclear payee details.

To provide some context, parent-child hierarchies describe situations where a corporate (parent) company makes a payment on behalf of its subsidiaries — these are the children in question — or multiple entities that are related and part of the same customer account. In some cases, these subsidiaries or divisions receive an invoice but aren’t making a payment. 

Fazeshift can help finance and accounting teams automate the cash application process at scale across multiple ERPs with the help of our robust integrations, with real-time syncs, and advanced payment matching capabilities.   

More specifically, Fazeshift’s cash application agent is designed to handle complex parent-child hierarchies, recognize different remittance formats, and streamline the accounting process for multiple entities. 

Fazeshift can effortlessly handle parent-child hierarchies in the cash application process so cash flow forecasts are accurate and up to date. Fazeshift also enables you to create customer groups, which lumps any number of your customers together, and send consolidated statements, provide them all with access to a payment portal, and monitor their behaviors, such as when payments are made and what’s overdue.

AI-driven cash application accelerates and improves the accuracy of how payments are matched to invoices, which speeds up reconciliation times and creates a better cash flow for your organization.

As a robust automation solution, Fazeshift’s AI cash application agent can handle many complex scenarios, such as partial payments, parent-child relationships, and multiple payments for a single invoice, that are typically flagged as exceptions and set aside for your team to review. Fazeshift’s AI cash application agent can accurately complete the matching process even when there’s missing or vague remittance data. 

By spending less time in exception queues, payments can be applied faster. 

Since Fazeshift’s AI cash application agents can match payments to invoices on the same day, this reduces the amount of time that receivables sit in a processing queue as unapplied cash. When accounts receivable balances close faster, this results in a lower DSO. 

With real-time visibility into what’s paid and open, Fazeshift enables your finance team to forecast collections more accurately and prioritize high-risk accounts faster. With a better working capital strategy, your finance team can work on keeping DSO down over time.  

Hiring another person may make it a little faster for your team to manually match invoices, reach out to customers for remittance details, and enter that data into systems, but it’s not an effective long-term strategy if your business is scaling, much less a guarantee that error rates will go down. 

With Fazeshift in place, your accounts receivable team can focus on resolving payment disputes, handling tricky exceptions, and spending time on other high-value tasks.

By having a faster and more efficient cash application process that’s less prone to errors, your organization can expect a reduction in DSO, fewer payment disputes from customers, and improved cash forecasting. 

On a related note, Fazeshift has automation controls, full audit trails, and timestamped activity and exception logs, so you can see what data our AI agents used, how it was interpreted, what was done, what actions are recommended, and who approved certain actions.