Integrate cash application with deduction management

How important it is to integrate cash application with deduction and dispute management?

When payment comes in the most urgent thing is to have it applied to open invoices. Sometimes cash appliers don’t pay attention to extra information that is provided for deductions or why the invoice is short paid. Lot of important data is lost or files are misplaced during payment processing. Later on deduction managers have to revisit check remittance details to look for short payment codes, look up for any other attached documents or manually clear allowed freight or discounts. This can be simplified if cash application system can capture all that info.

What process can automatically run during payment application to help to manage deductions and disputes ?

  • Reason codes - customer provides code for short payment, this code should be mapped with valid reason codes in the system. This allows to track and report by reason code

  • Discount values - system can automatically detect invalid discount and based on tolerance (amount, percent or past due) either write off or consolidate for later collection.

  • Freight and ad allowances can be automatically cleared according to establishment for customers

What information can be captured during payment application that can help to mange deductions and disputes ?

  • Notes or comments on remittance lines - customers like to leave notes on remittance details on both short paid invoices or new deductions. System should capture and save this information for dispute processors.

  • Check image - check image with remittance details or additional attachments to the check should be linked to the payment and all new created memos under the given payment.

  • Attachments - email attachments or other customer communication with payment processors should be easy accessible to collection department.

In summary, deductions can be automatically coded, routed, and even cleared before creating and leaving them open on the A/R, thus cutting down the number of open transactions and keeping the A/R as clean as possible. The complete history of receipt, deductions and invoices paid with their attached documents can be reviewed for immediate resolution.

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