WorkflowAccounts Receivable Automation (Order-to-Cash)

Cash Application Automation

Cash application automation that explains every match, proves it to the cent and leaves the signature to you

Every payment posted the day it lands, with each short pay sent to deductions on proof.

See one case, screen by screen ↓
demo186paymentsreceived on the sample Wednesday, $10,413,764.93 across four entities
demo$0.00differencewhen the checker re-added one payment across 41 invoices and 2 short pays on its own
demo76.1%of payments applied with no touch in the sample week, up from 58.4% at go-live
target90%of payments applied with no touch, against a published median of 70%
In short

What is Cash Application Automation?

Software that applies incoming customer payments to the open invoices they pay: it captures the remittance wherever it arrives, matches it to the cash and the invoices, and posts the receipt to the ERP. Cash Application Automation does this with eight agents that read, match, code short pays and check every payment to the cent, and leaves the payments the policy reserves for a person to the cash application lead to sign.

How to choose AI solutions for back-office and enterprise work →

Updated

The problem

Why cash sits unapplied while the customer has already paid

The payment and the remittance that explains it rarely arrive together. The ACH lands at 07:02 with 80 characters of addenda; the remittance advice comes an hour and 45 minutes later as a PDF in the shared inbox. Other customers post it on their AP portal, send an EDI 820, or mail a check stub to the lockbox, and most write invoice numbers their own way. Until someone pairs the cash with the remittance and keys it against open items, the money is unapplied.

Unapplied cash does damage downstream. The customer still looks past due, credit keeps their orders on hold, collectors chase an invoice that was paid, and DSO looks worse than it is. Short pays get keyed as unapplied with no reason code, so the deductions team sees a promotion deduction weeks later, without the remittance line or the agreement clause, when it is much harder to dispute.

typical70%median share of payments matched with no touch
typical61%of teams match payments on the day they arrive
typical$15Munapplied cashthat better matching can free up, at the top of the published range
Where a cash application team's hours go each dayestimated
By hand10 days
With the solution2 days
  • Finding the remittance and pairing it with the cash2 → 0.3 d
  • Keying remittance lines from PDFs, portals and stubs2.5 → 0.2 d
  • Matching lines to open invoices1.5 → 0.2 d
  • Researching and coding short pays1.5 → 0.3 d
  • Unknown payers, duplicates and other exceptions1.5 → 0.8 d
  • Posting and reconciling the deposit to the bank1 → 0.2 d

Estimated split of a day's work for a shared-service team applying cash for four entities, by hand and with the solution.

How it works

How a payment is applied

Eight agents read, match, split short pays and check every payment to the cent; the cash application lead signs.

What comes in
Payments and remittances in5 channels · bank files, email, portals, EDI 820, lockbox
Agents at work
Remittance readerevery line
Portal collectorread-only
Then
Payment matcherapproved rules only
Short-pay classifiercode + clause
Then
Checkerto the cent
Then
ERP posterafter the green
Unapplied-cash watcherlifts holds
Rule proposerneeds approval
A person decides
Cash application leadsigns with a reason code
What comes out
Receipt posted
Deduction case with proof
Credit hold lifted
One case, step by step

One payment, from the bank to a lifted credit hold

Wednesday 14 October 2026, at Kestrel & Vane Group's order-to-cash shared service in Columbus, Ohio. 186 payments worth $10,413,764.93 have come in for four entities, and the cut-off is 16:00. One of them, $248,317.55 from Halcyon Foods, needs the cash application lead. Here is how she works it with the agents, screen by screen, in the working solution.

  1. 0110:12

    The agents bring her one payment and say why

    Mia Torres · Cash application lead

    Mia's day opens on the payment, not a dashboard. The day's 186 payments run across the top as a strip of tiles, 47 not yet applied, 5 h 48 min to cut-off. Halcyon Foods' ACH CCD+ is ready to sign, and the screen says why it needs her: 2 short pays over $500, $2,100.00. Below it, the agents report what each one did on this payment: 41 lines read, 41 invoices proposed, 2 short pays coded, sum exact.

    She asks: “Why does the Halcyon Foods payment need me?” The answer cites the remittance, agreement TPA-2026-14 and the checker, and points her to line 10: “reads 2604319, matched to KV-INV-2604391 on amount and date (0.88).”

  2. 0208:47

    The remittance came by email, an hour and 45 minutes after the cash

    Remittance reader

    Halcyon's addenda said only HALCYON FOODS PMT 0019387. At 08:47 its AP team emailed remittance advice 0019387, three pages. The reader took all 41 lines and shows them beside the PDF: the prefix Halcyon leaves off added by an approved rule, two lines citing PO numbers rather than invoices, and line 10 flagged “2 digits transposed”.

    The remittance reader never invents a reference. Unreadable text is marked unreadable.

  3. 03One payment, 41 invoices

    The payment fans out to every invoice it pays

    Payment matcher

    The matcher paired the email with the ACH on document number 0019387 and amount, and drew the application as a fan: one line to each of 41 open invoices worth $250,417.55, labelled with the amount applied and what it matched on. 39 are paid in full. Two lines split off on an amber branch, $2,100.00 to deductions.

    The matcher uses only rules a person has approved, and never another customer's or entity's invoice.

  4. 04One click on line 14

    Each short pay tied to the clause that explains it

    Short-pay classifier

    Line 14, KV-INV-2604434, is $1,240.00 short and the remittance reads PRM-2207 FALL FEATURE. The classifier ties it to trade promotion agreement TPA-2026-14 §3.2, signed 3 Jul 2026: a $1,240.00 feature fee for the September feature ad. The amount agrees, so it codes P10 Promotion and drafts deduction case DC-26-1183 for Carlos Benítez, with a request for proof of performance. Line 29's $860.00, TPR-0918, ties to §4.1.

    The classifier only proposes the code. It never writes off a short pay or closes a deduction.

  5. 05Show the check

    A second agent adds it all up on its own

    Checker

    The checker reads the remittance and the ledger itself, without the matcher's work. $248,317.55 applied plus $2,100.00 to deductions equals $250,417.55 open; payment minus applied is $0.00. No invoice applied twice in 18 months of history. Its confidence is 0.96, lowered by the transposed line 10. The two readings sit side by side.

    “If the two readings differ, the payment stops and both go to the cash application lead.”

  6. 06Approve and post

    She signs with a reason code and a note

    Mia Torres · Cash application lead

    Mia picks A02 Applied with short pays to deductions and writes why: “Short pays match TPA-2026-14; transposed line 10 checked against the invoice.” Devon Akers prepared the payment, so preparer and approver differ. The signature, reason and time go on the audit trail.

    “You are signing as Mia Torres, cash application lead.”

  7. 0710:12, signed

    Posted, reconciled, and credit asked to release the orders

    ERP poster · Unapplied-cash watcher

    Batch CA-1014-09 posts 41 applications to the ERP. 39 invoices clear, the two residuals are booked with reason code P10 and cases DC-26-1183 and DC-26-1184 go to Carlos Benítez, and the deposit reconciles to Ridgeway Trust ···4471 to the cent. Halcyon's past due drops from $222,159.90 to $0.00, so the watcher asks Ingrid Solberg in credit to release 3 orders worth $64,880.00, with the posting as proof.

    The watcher never releases a hold itself. Ingrid presses Release hold.

  8. 08Meanwhile

    An unknown payer, worked and proposed

    Devon Akers · AR specialist

    An ACH for $18,240.00 came from J&R HOLDINGS LLC, a payer not on file. The agents looked the bank account up in 18 months of payments, found the credit file naming J&R Holdings as Ravensholt Outdoor's parent, and found 4 open Ravensholt invoices that add up to $18,240.00 exactly. They propose Ravensholt at 0.86; Devon confirms, or asks Ridgeway Trust for a trace.

    “The agents propose; Devon Akers decides. Nothing goes to a customer until a person presses Send.”

  9. 0910:05

    A rule learned from her choices waits for the controller

    Rule proposer

    Every Halcyon payment in 90 days needed a person for its promotion short pays. From Mia's choices the proposer wrote rule R-044 in plain words: a short pay whose remittance line cites PRM- or TPR- gets P10 Promotion, and the case cites TPA-2026-14. Backtested on 90 days: 38 cases, 38 agree, 0 disagree, $38,420.00 touched. Today's signature takes her choices to 23.

    “Until the controller approves it, the agents do not use this rule.” Mia, whose choices it learned from, cannot approve it.

  10. 10Since go-live on 7 Jul

    Fewer payments wait for a person, week by week

    Martin Cole · Group controller

    Touchless is 76.1% this week, up from 58.4%, against a target of 90%. 79% of payments are applied the day they arrive, up from 49%. Unapplied cash over 5 days is $589,344, down 51% from $1,214,880, and 100% of October's 118 short pays, $101,430, were coded the same day. EDI 820 customers are 94.2% touchless; lockbox images are hardest, at 58.6%.

Who it’s for

Built for everyone who touches incoming cash.

The same Wednesday's payments, seen by the four people who carry them — what their day looked like, and what it looks like now.

MT
Mia TorresCash application lead · Columbus shared services
Cash application lead
Before
Owns the 16:00 cut-off for four entities and keys remittances alongside her team. “I don't want to key in remittances. I want to decide the ten payments a day that actually need a person.”
Now
Opens each payment the policy reserves for her with the agents' reason, every line cited and the checker's sum, and signs with a reason code.
DA
Devon AkersAR specialist · with Aaliyah Grant and Tomás Ferreira
AR specialist
Before
Works unknown payers, overpayments, duplicates and torn check stubs. “Half my morning goes on finding out who sent a wire.”
Now
Opens each exception with the agents' plan, the sources they read and a proposed answer, and decides.
LH
Lena HoffmannTreasury analyst · daily cash position
Treasury analyst
Before
“The bank says $10.4 million came in. I need to know how much of it is still sitting as unapplied.”
Now
Sees today's cash position, unapplied cash by age and reason, and every deposit reconciled to the bank to the cent.
MC
Martin ColeGroup controller · signs over $1,000,000, rules and settings
Group controller
Before
Answers to the auditors for cash receipts. “Show me nothing posts on one system's word, and that every rule has a name next to it.”
Now
Approves each learned rule on its decisions and backtest, signs the largest payments, and exports the audit trail as evidence.
Built on the engine

8 agents. Each with one job, and hard limits.

Eight agents read, match, split short pays and check every payment to the cent; the cash application lead signs.

Remittance reader

Finds and reads remittance in email PDFs and bodies, ACH addenda, EDI 820, wire remittance fields and lockbox images, and extracts every line with its references and amounts.

  • Never invents a reference
  • Unreadable text is marked unreadable
Portal collector

Signs in to customer AP portals on a schedule and downloads remittance and payment notices for the reader.

  • Read-only: never accepts terms or changes portal data
  • Never stores a password outside the vault
Payment matcher

Identifies the payer, pairs payment and remittance that arrived apart, and proposes the application to open invoices from references, PO numbers, amounts, dates and approved rules.

  • Never uses an unapproved rule
  • Never applies to another customer's or entity's invoice
Short-pay classifier

Splits short pays and overpayments, assigns reason codes, ties each to the remittance line and the clause of the promotion, returns, freight or pricing agreement, and drafts the deduction case.

  • Never writes off a short pay or closes a deduction
  • Only proposes the code
Checker

Re-reads the remittance and the ledger on its own and confirms that applied plus short pays equals the payment to the cent, and that every invoice is open, the payer's, in the right entity and currency, and not applied twice.

  • Never edits the proposal; it agrees or stops it with its reason
  • A disagreement sends the payment to the cash application lead
ERP poster

Posts signed and touchless applications in batches, clears invoices, books residuals with reason codes and reconciles the deposit to the bank statement.

  • Never posts without the checker's green and every signature the policy needs
  • Retries only items that are safe to repeat
Unapplied-cash watcher

Watches unapplied and on-account cash by age, asks credit to release holds when a posting clears a past-due balance, and drafts remittance requests to customers.

  • Never releases a hold or sends an email itself
  • A person presses the button
Rule proposer

Turns choices reviewers keep making into a rule in plain words, with the decisions it came from and a 90-day backtest.

  • Never switches a rule on
  • Every rule waits for the controller
Cash application lead

Signs short pays and exceptions. The agents propose; a named person decides.

Ask in plain words

Ask the agents about any payment, in plain words

Ask about any payment, customer or short pay, or say what to sign. Every figure in the answer is cited, and anything that changes the ledger is proposed for a person to sign.

Why does the Halcyon Foods payment need me?

Two short pays over $500. Halcyon paid $248,317.55 by ACH and emailed the remittance at 08:47. 39 invoices are paid in full. Line 14 is short $1,240.00 (PRM-2207) and line 29 is short $860.00 (TPR-0918); both agree with agreement TPA-2026-14. The checker re-added everything on its own: difference $0.00. One line to glance at: line 10 reads 2604319, matched to KV-INV-2604391 on amount and date (0.88).

What has been unapplied for more than 5 days, and why?

$589,344.17, down 51% since go-live. The largest: Stonebrook Fitness $148,812.90, held on account at the customer's request; Larchmont Builders Supply $120,000.00, a prepayment for a project not yet invoiced; Marrow & Pike Retail $118,402.76, a pricing dispute still open; Dunmore Packaging Users Co-op $98,200.00, a rebate offset waiting for the rebate statement. Tessaline's $186,420.00 goes over 5 days tomorrow and has no remittance after 3 requests.

Approve every ready payment within my limit

Signed the ready payments as Mia Torres, each with the checker green, and posted them in batch CA-1014-09. Aldermoor Beverage Co. ($1,284,500.00) is over $1,000,000, so it was approved and sent on to Martin Cole. Short pays went to Carlos Benítez with their cases.

Which credit holds can be lifted after today's cash?

Three, once their payments post: Halcyon Foods (3 orders, $64,880.00), Greyfield Home Centers (2 orders, $18,214.50) and Orrin Medical Devices (1 order, $96,400.00). Tessaline Distribution stays on hold: its 9 Oct payment has no remittance. Ingrid Solberg is asked to release each hold, with the posting attached.

Every screen

The working solution, as it ships.

13 screens from the working solution, on its sample data. Pick one to see it large.

Today: one payment, fanned outThe day's payments as a strip across the top; one payment fanned out to the 41 invoices it pays, short pays branching to deductions, the reason it needs a person and the checker's sum.
Remittances, wherever they arriveEmail, portals, bank and EDI, and lockbox: the remittance advice beside the 41 lines the reader took, with the transposed digits and the short pay flagged.
One line and its evidenceThe remittance line as read, why the matcher chose the invoice, the agreement clause behind the short pay and the checker's tests on the line.
The check, done separatelyThe checker's own steps, from re-reading the remittance to looking for double application, and the two readings side by side.
Approve and postPayment, invoices, deductions and the checker's result, with the reason code, the comment and who prepared it.
Signed and postedEach step after the signature: the batch posted, invoices cleared, residuals booked, the deposit reconciled and credit asked to release the hold.
Exceptions, worked by the agentsUnknown payers, overpayments, duplicates, wrong entity, currency differences and disputes, each with the agents' plan, sources and proposed answer.
Short paysEvery short pay split today with its remittance text, reason code, evidence and where it stands, before or after it reaches deductions.
Unapplied cash and credit holdsUnapplied cash by age and reason, today's cash position for treasury, and the credit holds that today's postings can lift.
A learned rule, waiting for approvalThe rule in plain words, the decisions it learned from, its 90-day backtest and who may approve it.
ReportsTouchless and same-day application week by week, unapplied cash over 5 days, short pays by reason and touchless by how the remittance arrived.
Audit trailEvery action by people and agents — who, what, when and on which record — exportable as evidence.
Your limitsConfidence to post on its own, short-pay and write-off limits, the controller's limit, new bank accounts, the cut-off and the remittance wait.
Governance

Built for cash receipts controls: cited, checked twice, signed, on the record.

Every line cites its remittanceEach application line points to the remittance line and document it came from, and each short pay to the clause of the customer's agreement. The assistant cites every figure it gives.
Nothing posts on one agent's wordA separate checker re-reads the remittance and the ledger and must agree to the cent before anything posts. When the two readings differ, the payment stops and goes to the lead.
A named person signs what policy reservesShort pays over $500, write-offs over $25 and new bank accounts need the cash application lead; payments over $1,000,000 and write-offs over $250 need the controller. No one signs a payment they prepared.
Rules are used only after approvalA rule learned from reviewers' choices starts as proposed, with its decisions and a 90-day backtest. The controller approves or rejects it, and the person whose choices it learned from cannot.
Agents never move money on their ownApart from the small write-offs your policy lets them post, such as bank fees up to $25, the agents never write off, refund or release a credit hold, never change settings, and never send anything to a customer until a person presses Send.
Every step on the audit trailEvery agent step, decision, posting and settings change is recorded with who, what, when and on which record. Nothing on it can be edited or deleted, and it exports as an evidence bundle for testing cash receipts.
Configuration

Your cash application policy, not ours

The limits every payment is checked against are settings. Every change is submitted for the controller's approval and lands on the audit trail.

SettingDefaultChoose from
Post on its own above this confidence0.950.90 to 0.99; the matcher and the checker must both agree
A short pay over this needs the cash application lead$500Any amount; smaller ones are coded and sent to deductions on their own
Write off on its own up to$25Any amount; bank fees and rounding, reason A03
The lead signs write-offs up to$250Any amount; above it the controller signs
Payments over this need the controller too$1,000,000Any amount; a second signature after the lead
First payment from a new bank account needs the leadOnOn · Off
Same-day cut-off16:00Any time, Eastern; alerts start 2 hours before
Wait for a remittance before drafting a request4 hoursAny number of hours after the cash arrives
Connections

Works with the systems cash already arrives through

Bank filesBAI2 prior-day and intraday, ISO 20022 wires, ACH CCD+ and CTX
Lockboxcheck and stub images from your lockbox bank
Remittance inboxremittance PDFs and email bodies, read line by line
Customer AP portalsremittance and payment notices, collected read-only
ERPopen items, customer master, posting and reason codes
Agreements, deductions and credittrade promotion agreements and price lists, the deductions team, the credit hold list
What it changes

The difference, in numbers.

Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.

target
60%
less unapplied cash older than 5 days, within 90 days
At go-live$1.21M
With agents$0.59M
target
90%
of payments applied with no touch; the published median is 70%
90 of 100 payments
median today: 70
target
1day
for every short pay to reach deductions, coded and with its proof
Keyed as unappliedweeks
With agentssame day

“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (The Hackett Group, Cash Application Digital World Class assessment, Aug 2025: median touchless auto-match 70%, 61% match payments on the day they arrive, and better matching can free up to $15M of unapplied cash). Kestrel & Vane Group, its customers, banks, payments and the people named on this page are fictional — characters and sample data in the working solution.

Questions

What controllers and receivables teams ask us.

What is cash application automation?

Software that applies incoming customer payments to the open invoices they pay: it captures the remittance wherever it arrives, matches it to the cash and the invoices, and posts the receipt to the ERP. Cash Application Automation does this with eight agents that read, match, code short pays and check every payment to the cent, and leaves the payments the policy reserves for a person to the cash application lead to sign.

How does it read remittances that arrive apart from the payment?

The remittance reader reads email PDFs and bodies, ACH addenda, EDI 820, wire remittance fields and lockbox images, and the portal collector downloads remittance from customer AP portals, read-only. The payment matcher then pairs the remittance with the cash on references and amount, even when it arrives hours later.

How does it handle short pays and deductions?

The short-pay classifier splits each short pay, proposes a reason code and ties it to the remittance line and the clause of the customer's promotion, returns, freight or pricing agreement. It drafts the deduction case with that evidence, so the deductions team gets it the same day. It never writes off a short pay or closes a deduction.

How do we know a match is right before it posts?

A separate checker agent re-reads the remittance and the ledger on its own and confirms that applied plus short pays equals the payment to the cent, and that every invoice is open, the payer's, in the right entity and currency, and not applied twice. Nothing posts without its green; if the two readings differ, the payment goes to the lead.

Does it learn from our team's decisions?

Yes, but only with approval. The rule proposer turns choices reviewers keep making into a rule in plain words, with the decisions it came from and a 90-day backtest. The rule is not used until the controller approves it, and the person whose choices it learned from cannot approve it.

Do people stay in control of what posts?

Yes. The agents propose and explain; a named person signs short pays over $500, write-offs over $25 and new bank accounts, and the controller signs payments over $1,000,000. The preparer and approver differ, credit releases its own holds, and nothing goes to a customer until a person presses Send.

Can we set our own limits and reason codes?

Yes. The confidence to post on its own, short-pay and write-off limits, the controller's limit, the new bank account rule, the cut-off, the remittance wait, the reason codes, roles and notifications are all settings. Every change is submitted for the controller's approval and recorded on the audit trail.

How long does it take to go live?

The Agentic Solution Engine builds and deploys it from your requirements and documents — your cash application policy, reason codes, bank files and a sample of past payments and remittances — and it goes live once every quality gate has passed. A guided setup connects the bank, inbox, portals and ERP and backtests 90 days of history before go-live.

See it on
your remittances.

We'll run Cash Application Automation on a sample of your own payments and the remittances that came with them.