Kolleno Payments
Every business wants faster cash flow. But before money hits the books, it needs to be matched to the right invoice. That’s where cash application comes in and for many finance teams, it’s a slow, manual grind.
Chasing remittance data. Cross-checking payments. Resolving short or partial payments. It all adds up to hours of manual work and delays in reconciliation.
With AI, businesses are rethinking the process. Automated cash application tools reduce the manual workload and bring speed, accuracy, and visibility to your AR function.
This article explains how AI powers the cash application, and the benefits that this gives your finance team.
The Problem with Traditional Cash Application
Cash application sounds simple: a customer pays an invoice, and the payment gets matched to that invoice in your accounting system.
But in practice, it’s rarely that straightforward.
Customer payments often come in without clear references. Remittance information might be missing, vague, or spread across emails, PDFs, and portals. You’re left trying to match payments to the right open invoices—often manually.
This slows everything down. Finance teams spend hours reconciling payments, chasing down remittance advice, and correcting short or partial payments. When they can’t match a payment, it gets left as unapplied cash. That distorts your accounts receivable (AR) data and delays cash flow.
Manual cash application also increases the risk of human error. Typos, mismatches, and overlooked invoices can cause serious knock-on effects, from frustrated customers to inaccurate financial records.
It’s a time-consuming, error-prone process that holds finance teams back. Especially when they’re dealing with high transaction volumes or customers who pay multiple invoices at once.
How AI Transforms the Cash Application Process
AI doesn’t just speed things up—it changes how cash application works altogether.
Instead of relying on manual data entry and human judgement, AI-powered cash application tools automatically extract and analyse remittance data. They read emails, PDFs, customer portals, and payment references to identify which invoices have been paid.
Machine learning models learn from your historical data. Over time, they get better at handling edge cases—like partial payments, short payments, or vague remittance advice. They recognise customer payment behaviours and predict how to match payments even when key details are missing.
AI can also flag anomalies or discrepancies for review. That reduces the need for manual intervention and gives finance teams more confidence in the data.
The result? Payments are matched to the correct invoices faster, with fewer errors. Teams gain real-time visibility into their accounts receivable (AR) position, helping them forecast more accurately and reduce days sales outstanding (DSO).
In short, AI transforms cash application from a tedious process into a smart, self-learning system.
Key Benefits of AI-Powered Cash Application
Switching to automated cash application delivers more than just time savings. It fundamentally improves how finance teams manage accounts receivable.
Faster processing, fewer delays
AI matches customer payments to invoices in seconds, even when remittance information is incomplete. That means less time chasing data and more time moving cash through the business.
Improved cash flow and forecasting
With faster reconciliation and fewer unapplied payments, you gain a clearer view of your incoming cash. This improves cash flow management and helps finance leaders make decisions based on up-to-date numbers.
Fewer errors, better data
AI reduces human error by removing manual data entry and repetitive tasks. It also keeps your financial records cleaner—critical for audit trails, compliance, and confident reporting.
More control, less manual effort
By automating the most tedious parts of the process, teams can spend less time firefighting and more time focusing on strategic work. Exceptions are flagged early, and manual intervention is only needed when it really matters.
Real-time visibility across AR
With real-time processing and seamless ERP integration, teams get instant visibility into what’s been paid, what’s still open, and what needs attention. That helps tighten internal controls and reduce DSO.
What to Look for in an AI-Powered Cash Application Solution
Not all automated cash application tools are created equal. If you’re evaluating solutions, here’s what to prioritise:
1. Accurate invoice matching
The system should reliably match payments to invoices, even when remittance information is inconsistent or missing. Look for solutions that use machine learning to improve over time and adapt to different customer payment behaviours.
2. Support for complex payment scenarios
Your tool should handle partial payments, short payments, and payments covering multiple invoices. It should also be able to parse different formats, whether the payment arrives via wire transfer, electronic payment, or traditional bank file.
3. Real-time visibility and control
Choose a solution that gives your team real-time insights into incoming cash, open invoices, and outstanding exceptions. This helps you maintain accurate financial records and improves cash forecasting.
4. Seamless ERP integration
The best solutions integrate directly with your existing ERP system or accounting systems. That ensures updates flow automatically between tools, reducing manual data entry and avoiding duplication.
5. Built-in exception handling and auditability
A strong cash application solution should flag anomalies, route them for review, and maintain clear audit trails. This strengthens internal controls and reduces risk.
6. Minimal manual intervention
The goal is efficiency. A modern solution should reduce manual effort by automating as much of the cash application process as possible, freeing up your team for higher-value work.
How Kolleno Delivers Smarter Cash Application
Kolleno’s cash application automation is designed to eliminate manual effort, reduce unapplied cash, and accelerate the entire accounts receivable process.
At the core is AI-powered automation. Kolleno pulls in payment and remittance data from multiple sources—emails, PDFs, bank files, and customer portals—and automatically matches payments to the correct invoices. Even when remittance advice is vague or missing, the system uses machine learning to infer the right matches based on historical patterns and customer behaviour.
The software handles wire transfers, electronic payments, and partial or short payments with ease. It flags any exceptions for quick review, reducing the need for manual intervention.
With Kolleno, finance teams can:
- Match incoming payments to the right invoices faster and more accurately
- Cut down on unapplied cash and delayed reconciliations
- Gain real-time visibility across all payment processing activity
- Integrate directly with their ERP system for seamless updates
- Improve cash application efficiency without hiring more staff
Kolleno’s solution doesn’t just speed up reconciliation—it gives finance leaders a comprehensive view of their cash position and the confidence to act on it.
Final Thoughts
AI is no longer a nice-to-have in the cash application process. For businesses dealing with high transaction volumes, complex payment types, and rising pressure on working capital, it’s essential.
By automatically matching customer payments to invoice numbers, AI improves accuracy, reduces manual effort, and accelerates cash flow. It also gives finance teams the visibility and control they need to make better decisions—without the delays and risks of manual cash application.
Kolleno’s AI-powered cash application software is built for finance teams that want to work smarter. It reduces unapplied cash, handles messy remittance data, and integrates directly with your ERP system—all while improving cash flow and freeing your team to focus on what matters.
Ready to eliminate manual reconciliation and gain real-time visibility into your AR? Learn more about Kolleno’s cash application software today.
