Cash application

Cash application is matching customer payments to the correct invoices. If you skip it, clients look overdue when they are not—or balances look paid when they are not.

Bad application breaks trust (“Why are you chasing me? I paid!”) and breaks reporting (AR and aging become fiction).

It is the quiet middle step between “payment received” and “books you can trust.”

Ask clients to include invoice numbers with every payment. Put that request on the invoice and in reminders.

Apply cash the same day you see deposits when possible. Investigate short-pays quickly instead of marking fully paid and hoping.

For bundled payments covering multiple invoices, allocate explicitly and confirm the remaining balances in writing.

Short-pay example: invoice $2,000, payment $1,850. Do not ignore the $150. Ask whether it is a deduction, error, or partial payment plan.

Unidentified cash: search recent invoices by amount and client name, then email the payer for a reference. Park it in a clear “unapplied” list until solved.

Never guess silently for large amounts. A wrong guess creates two problems later.

Use consistent invoice numbers and keep History statuses updated in AI Invoice Generator so application matches what clients see.

Reconcile weekly: deposits in bank vs invoices marked paid. Exceptions are the worklist.

If a teammate helps with admin, document the application rules so everyone treats short-pays the same way.

Review the last ten deposits and confirm each is linked to an invoice.

Add “Please include invoice number INV-#### as your payment reference” to your invoice template if it is missing.

Clear any unapplied payments older than two weeks this week.