What is Cash Application?
Cash application is the process of matching incoming customer payments to the correct invoices in accounts receivable. It involves identifying what has been paid, applying the payment correctly, and managing differences such as short payments, overpayments, or missing remittance information.
This process directly affects cash flow visibility and the accuracy of customer balances. If cash is not applied correctly or on time, open items can remain unclear, and finance teams may spend time investigating issues that are caused by matching or posting delays.
For SAP finance teams, cash application is more efficient when matching and clearing are handled within SAP rather than in spreadsheets. BEST’s Customer Clearing module supports this by automating the matching and clearing of customer payments, helping to reduce manual effort and keep accounts receivable accurate.
Cash application is the way finance teams ensure incoming payments are correctly recorded and linked to the right transactions.