The Automated Cash Application NetSuite feature allows users to automatically generate a batch of customer payments in NetSuite and allocate them to outstanding invoices. These generated payments are subsequently matched and reviewed automatically within the system. This feature enables NetSuite users to import or link their bank data, facilitating an efficient reconciliation process by matching invoice numbers from the payment import file with existing invoices in NetSuite. This application can be particularly advantageous for clients who regularly import their invoices on a weekly basis or employ an alternative integration. 

Key Takeaways

• The Automated Cash Application feature allows you to automatically create a batch of customer payments within NetSuite and apply these to outstanding invoices. 
• The Automated Cash Application shows all positive bank lines for an account and assigns a customer to each matched transaction.
• Before matching transactions manually, utilize the Automated Cash Application feature to generate and match all customer payments from imported bank lines.

Cash Application in NetSuite

You can import bank lines without corresponding customer payments in NetSuite. The Automated Cash Application NetSuite feature lets you automatically create a batch of customer payments within NetSuite, which are then applied to outstanding invoices. The system will automatically match and clear these generated customer payments.

The Automated Cash Application tool simplifies the process by automatically matching imported bank data with existing customers and open invoices in the NetSuite ERP system. It employs a customizable matching algorithm to guarantee high match accuracy for both customers and invoices. After reviewing and confirming the matching results, the system automatically generates customer payments, applies these to the selected invoices, and reconciles cash payments from bank statements. 

Key Benefits of Automating Cash Application in NetSuite

1. Improved Accuracy and Reduced Errors

• Automated processes eliminate manual data entry errors when matching payments to invoices.
• Reduces discrepancies in accounts receivable, ensuring accurate financial records.

2. Faster Payment Processing

• Automating cash application speeds up payment allocation, reducing the time taken to reconcile accounts.
• Businesses can achieve near-real-time cash application, improving cash flow visibility.

3. Enhanced Efficiency

• Automation reduces the need for manual intervention, allowing the finance team to focus on higher-value tasks.
• Saves significant time spent on repetitive processes like invoice matching and payment reconciliation.

4. Improved Cash Flow Management

• Provides a clear and up-to-date view of cash inflows and receivables.
• Helps businesses forecast and plan financial operations more effectively.

5. Better Customer Relationships

• Faster and accurate application of payments minimizes errors in customer accounts.
• Improves customer satisfaction by reducing disputes and providing clear account statements.

6. Integration with Banks and Payment Platforms

• NetSuite’s automation tools can integrate with bank feeds, payment processors, and lockboxes to streamline data import.
• Automatically matches payments with invoices based on pre-defined rules, reducing the need for manual reconciliation.

7. Enhanced Reporting and Analytics

• Automation enables real-time tracking and reporting of cash application metrics.
• Provides actionable insights to optimize accounts receivable processes.

8. Cost Savings

• Reduces the cost of manual labor associated with cash application processes.
• Minimizes the risk of penalties or late fees due to misapplied payments.

Step-by-Step Guide to Automate Cash Application in NetSuite

Here’s a guide to the Automated Cash Application NetSuite. Individual client environments may vary based on customizations or the financial institutions they use. Nevertheless, this overview aims to provide a clear understanding of the feature’s capabilities.

Step 1

Begin by choosing the account to which you wish to upload payments. Next, click ‘Upload file’ located at the top right of the screen. In the Upload File interface, you have two options for importing the file: you can either use the default parser with NS’s template or opt for the financial institution’s import template. The latter serves as a saved import file, offering greater flexibility. Additionally, this screen allows for enabling a plug-in to a bank, with the condition that the plug-in must be created beforehand and can be activated here.

Step 2

After a successful import, observe all the entries in the Match Bank Data screen. Our goal is to generate payments for these entries and transfer them to the Automated Cash Application button located in the top right. You have the option to choose individual payments or use the selection option on the grey row to select all when matching multiple transactions. Finally, click ‘Submit.’

Step 3

On the Automated Cash Application screen, pay attention to the customer field. This field features a dropdown menu containing all customers, with the default choice based on the Accounting Preference of either Exact or Preferred match. If there’s no match, you’ll need to establish a rule that creates a default for similar payor names. These rules will apply to future imports, and you can view all the rules by clicking ‘View Customer Mapping Rules’ beside the submit button. The rules can be modified or removed as customer relationships change.

Step 4

When submitting payments, certain Accounting Preferences may affect the sequence of completed transactions. Navigate to Setup > Accounting Preferences > Accounts Receivable > Apply Payments Without Invoice Numbers to see three options that influence how payments are processed without invoices. The default setting is “Apply by payment amount first, then to oldest invoice.” Frequently, payments have already been allocated to the invoices and associated with everything in the list.

Step 5

Once you choose the payments to apply, click the ‘Submit’ button to initiate payment generation. Wait for the payment to process, and you will be able to access the record directly from the generation page. Ensure that the values match those from the import template.

Step 6

Finally, it’s time to reconcile the account. You can do this in the Match Bank Data screen. In the upper right corner, click on the ‘Reconcile Account Statement’ button. You’ll see that the newly created transactions are automatically matched in the ‘Review’ subtab, while the remaining transactions can be reconciled.

Common Challenges and Troubleshooting

1. Bank File Format Issues

Challenge:

Mismatched file formats from bank statements (e.g., CSV, BAI, MT940) that don’t align with NetSuite’s requirements. 

Troubleshooting:

Use NetSuite’s Bank Reconciliation Import functionality or third-party tools to standardize file formats.

Ensure the bank’s format matches NetSuite’s configuration for smooth imports.

2. Payment Matching Failures

Challenge:

Inability to match payments with invoices due to inconsistent references (e.g., incorrect invoice numbers or missing customer information).

Multiple payments applied to a single invoice or vice versa. 

Troubleshooting:

Configure matching rules in NetSuite to account for variations in payment references, such as partial matches or ignoring special characters.

Use NetSuite SuiteScripts to customize matching logic for complex scenarios.

Review and resolve unmatched transactions using manual reconciliation tools.

3. Duplicate Payment Records

Challenge:

Duplicate entries created during import or automation processes.

This can inflate account balances and cause reconciliation issues.

Troubleshooting:

Enable duplicate detection settings in NetSuite.

Regularly audit payment imports and clean up duplicate transactions.

4. Partial Payments and Credit Notes

Challenge:

Difficulty in handling partial payments or applying credit notes correctly.

Troubleshooting:

Ensure proper configuration for applying partial payments.

Use NetSuite’s standard tools or automation scripts to handle partial and overpayments efficiently.

5. Integration Failures with Bank or Payment Systems

Challenge:

Connectivity or API errors when integrating NetSuite with external bank feeds or payment processors.

Troubleshooting:

Verify API credentials, bank feed configurations, and NetSuite integration settings.

Check for rate limits or downtime on the external system’s side.

Use middleware tools like Celigo or SuiteCloud for enhanced integrations.

6. Currency Conversion Discrepancies

Challenge:

Exchange rate mismatches leading to incorrect application of payments in multi-currency environments.

Troubleshooting:

Regularly update exchange rates in NetSuite or sync with a reliable currency service.

Configure currency conversion rules to account for rounding differences.

7. System Performance Issues

Challenge:

Large volumes of transactions slow down the automation process or cause timeouts.

Troubleshooting:

Use NetSuite’s scheduled workflows or scripts to handle large batches incrementally.

Optimize saved searches and reduce unnecessary data processing in automation rules.

8. User Error in Setup or Configuration

Challenge:

Misconfigured automation rules or incomplete workflows lead to errors in cash application.

Troubleshooting:

Provide training to finance teams on NetSuite’s cash application features.

Conduct regular audits of workflows, SuiteScripts, and matching rules.

9. Insufficient Visibility into Automation Process

Challenge:

Limited insight into why certain payments fail to reconcile or how matching logic operates.

Troubleshooting:

Use NetSuite’s audit trail and logs to monitor payment processing and troubleshoot errors.

Implement real-time alerts or dashboards for tracking automation issues.

10. Lack of Customization for Unique Business Needs

Challenge:

Standard automation logic in NetSuite may not align with specific business requirements.

Troubleshooting:

Leverage SuiteScript or SuiteFlow to create custom rules for handling unique scenarios, such as complex invoice hierarchies or payment splits.

Engage NetSuite experts or partners to design tailored solutions.

Benefits of Partnering with a NetSuite Expert

Collaborating with a NetSuite specialist like Folio3 provides businesses unmatched advantages through customized solutions, smooth implementations, and continuous support to maximize the platform’s capabilities. 

With extensive knowledge of NetSuite’s ecosystem, a reliable partner facilitates seamless deployment while tackling specific business challenges through tailored customizations and integrations. They assist organizations in streamlining processes, improving efficiency, and accessing advanced features without a steep learning curve. 

Moreover, experts such as Folio3 offer proactive maintenance, training, and updates, allowing companies to remain agile and concentrate on growth. This collaboration minimizes risks and ensures a quicker ROI on your NetSuite investment.

Wrapping Up

The NetSuite Automated Cash Application tool simplifies the accounts receivable process, offering significant time savings for clients. It allows for the smooth import of bank data directly from the bank or treasury system, features customizable algorithms for transaction matching, and automates the process of creating and applying payments to open invoices.