Stories : Ours & yours

Unapplied Cash - How we reduced unapplied cash from $9m to $700

April 27, 2018
By Nathan Sanders

Our UK customer reduced their unapplied cash from nearly $9 million to under $700 in just a few months. Find out how...



The problems unapplied cash was causing…

Before we implemented Alloc8 Cash, we were facing large issues with unapplied cash, although we thought this was normal as most other credit managers I knew faced the same challenges. Beyond unapplied cash we had process issues where we were reviewing the same payment several times in order to apply it, which led to customers complaining and credit controllers spending time chasing for payment rather than doing their day job. At month end the situation was magnified because we had such a large volume of payments come in over 2 or 3 days. This meant that a large proportion of credit controllers became cash application clerks for 3 or 4 days of the month.

One of the most negative impacts of unapplied cash was that we had worked so hard to collect money from customers, only to be frustrated because we could not apply it once paid. If money was unapplied, it was not truly recognized.


How Alloc8 Cash brought it down

Quite a few of our team doubted that Alloc8 Cash would perform as promised!

However, we very quickly saw the impact Alloc8 Cash made. I remember when the bank statement was completed on the same day, it was a significant event that started to turn the doubters. Once we started receiving a second payment from customers the system really started to shine. It did exactly what was promised, learned what to do, and we started to see a big increase in automatic applied payments and a huge decrease in unapplied cash.

Because we could now measure all aspects of the process it motivated and brought about a new positive outlook and a sense of improvement to the entire team.


The effect on team morale

Credit controllers want to be managing collections and risk rather than calling customers for remittances and this is exactly what Alloc8 Cash allowed them to do.

No one wants to take a call from a frustrated customer, who has been affected by us applying our cash incorrectly.

The impact of Alloc8 Cash cannot be under estimated because as well as reducing unapplied cash, it meant that credit controllers had significantly more time. It was no coincidence we collected more cash and debtor days and aged debt reduced. This in turn boosted the morale of everyone.

Month end became ‘just another day’ as one of the cash clerks said which, in my mind, says it all.


The effect on the rest of the business

We had worked hard to build up positive working partnership with both sales and operations and how Credit Management was a positive to all stakeholders in the organization.

Before, it was well known that sales and operations colleagues were taking calls from customers complaining about how poor service in applying payments was affecting their business because of loss of service. When Alloc8 Cash solved this problem, our department became just as well known throughout out the business, but this time for all the right reasons.

Perhaps one of the most rewarding aspects of the Alloc8 Cash project was the praise and recognition we received from our CIO and external auditors - not something you get very often!


Alloc8 Cash - Intelligent Cash Allocation Automation

Alloc8 Cash is our world leading, intelligent cash application solution. Encompassing a built-in intelligent remittance and fast cheque capture, Alloc8 Cash is trusted by global companies to provide beyond world class results.

Alloc8 Cash boasts an intelligent self-learning engine and unrivalled hit rates and clear down times, all in a secure environment. Available to any company, in any country, and with any bank and currency. Our risk-free promise means you are in safe hands, knowing that you will be guaranteed world class and beyond in 6 weeks.

Find out more about our Alloc8 Cash solution and how you can reduce your unapplied cash, or contact us to book a free demonstration at a time that suits you...