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Agnostic Finance
Use Case

Cash Application

An AI agent that processes incoming customer payments and remittance advices, matches payments to outstanding invoices, and posts cash receipts in the ERP system, handling exceptions like short payments or unallocated cash.

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Process Details

Inputs

Bank payment files/reports, Remittance advices (various formats), Open AR invoice data from ERP

Outputs

Posted cash receipts in ERP, Cleared AR invoices, List of unapplied cash and unresolved deductions/discrepancies, Cash application performance reports

Systems

ERP System (SAP, Oracle NetSuite, Microsoft Dynamics 365) - AR Module, Cash Application Software (HighRadius, BlackLine), Online Banking Platforms (APIs)

The Challenge

Manual processes
create real problems.

  1. 1

    High potential for costly errors from manual data handling.

  2. 2

    Significant time and resources are spent on repetitive, low-value work.

  3. 3

    The manual process is difficult to scale without increasing headcount.

  4. 4

    Process bottlenecks lead to delays and missed deadlines.

The Solution

Describe it in English.
It runs deterministically.

  1. 1

    Data Collection

    Retrieves bank payment files (e.g., ACH, wire) from Banking Platforms and Collects remittance advices received via email (e.g., Outlook), EDI, or customer portals

  2. 2

    Remittance Data Extraction

    extract data from various remittance formats (PDF, email body, EDI, Excel), including invoice numbers, amounts paid, and deduction details

  3. 3

    Payment-to-Invoice Matching

    Matches extracted remittance information and bank payment data against open Accounts Receivable (AR) invoices in the ERP System. Handles complex scenarios like multiple invoices per payment, partial payments, and payments with deductions

  4. 4

    Deduction & Discrepancy Handling

    Identifies and codes deductions (e.g., trade promotions, discounts, damages) based on remittance information or predefined rules. Flags discrepancies (e.g., unearned discounts, unknown deductions, overpayments) and routes them to AR specialists.

  5. 5

    Cash Posting

    For successfully matched payments, the AI agent automatically creates and posts cash receipt journals in the ERP System, clearing the matched invoices

  6. 6

    Reporting

    Generates reports on cash application rates, unapplied cash, and deduction trends.

Primary Benefits

What you gain with
Kognitos automation.

Increase Efficiency

Dramatically reduce the time and manual effort required to complete the process.

Enhance Accuracy

Eliminate human error to ensure data integrity and reduce financial risk.

Empower Employees

Free your team from monotonous tasks, allowing them to focus on strategic work that requires their expertise.

Improve Scalability

Handle growing volumes of work without a proportional increase in operational costs.

Ensure Transparency

Maintain a complete, auditable trail of every action the AI agent takes, described in plain English.

FAQ

Common questions
answered.

The agent is designed for this complex, multi-source environment:
Bank Files: It can ingest and parse standard bank transmission files (e.g., BAI2, MT940) for ACH, wire, and lockbox payments.
Remittance Advices: It uses AI-powered data extraction to "read" and pull structured data from unstructured formats. It can process PDF attachments, data within an email body, customer portal screenshots, EDI files (like the 820), and Excel reports, linking them back to the bank payment data.
Customization and configuration typically take 3-4 weeks. It involves:
Discovery: Mapping your payment sources, remittance formats, and deduction coding rules.
Configuration: Setting up secure connections to your banking platforms, email inboxes, and ERP system.
Customization: Customize the agent with a sample set of your historical remittance advice
Testing: Processing recent payment batches in a test environment to validate the matching and posting logic.
Go-Live: Activating the agent to begin processing live transactions.
The agent uses a combination of methods:
Rule-Based Coding: It can be configured with rules to recognize specific reason codes provided by your customers (e.g., if a customer uses code "D1," the agent codes it as "Promotional Allowance").
AI-Powered Inference: For remittances without explicit codes, it can use natural language processing to infer the reason based on keywords (e.g., "damaged goods," "shortage," "early pay discount").
Kognitos functions as a comprehensive AI automated platform, delivering intelligent business automation solutions that optimize workflows and reduce manual effort. Kognitos integrates directly with all major ERP, CRM and productivity solutions for stable and durable automations.
The agent's AI-powered extraction can read detailed, multi-page remittance advice and match a single payment amount against hundreds or even thousands of individual invoice line items. It also handles parent/child company payments and can apply cash across multiple customer accounts based on the remittance details.
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Challenges

Solution

This use case solution follows these general steps at a high level:

  1. Data CollectionRetrieves bank payment files (e.g., ACH, wire) from Banking Platforms and Collects remittance advices received via email (e.g., Outlook), EDI, or customer portals
  2. Remittance Data Extractionextract data from various remittance formats (PDF, email body, EDI, Excel), including invoice numbers, amounts paid, and deduction details
  3. Payment-to-Invoice MatchingMatches extracted remittance information and bank payment data against open Accounts Receivable (AR) invoices in the ERP System. Handles complex scenarios like multiple invoices per payment, partial payments, and payments with deductions
  4. Deduction & Discrepancy HandlingIdentifies and codes deductions (e.g., trade promotions, discounts, damages) based on remittance information or predefined rules. Flags discrepancies (e.g., unearned discounts, unknown deductions, overpayments) and routes them to AR specialists.
  5. Cash PostingFor successfully matched payments, the AI agent automatically creates and posts cash receipt journals in the ERP System, clearing the matched invoices
  6. ReportingGenerates reports on cash application rates, unapplied cash, and deduction trends.

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