CRPA CRPA Technology & Automation in Accounts Receivable 1 — Questions and Answers
Question 1: What is the primary benefit of implementing Electronic Invoice Presentment and Payment (EIPP) in a receivables department?
- It eliminates the need for a credit policy
- It automates invoice delivery and enables customers to pay electronically, reducing DSO (Correct answer)
- It automatically writes off uncollectable receivables
- It replaces the need for a collections team entirely
Correct answer: It automates invoice delivery and enables customers to pay electronically, reducing DSO
EIPP streamlines invoice delivery and payment collection electronically, reducing manual effort and accelerating cash application, which lowers DSO.
Question 2: In an ERP system, what does 'cash application' refer to in the accounts receivable process?
- Approving new customer credit applications
- Matching incoming payments to the correct open invoices in the AR ledger (Correct answer)
- Generating customer statements automatically
- Forecasting future cash receipts based on historical data
Correct answer: Matching incoming payments to the correct open invoices in the AR ledger
Cash application is the process of accurately matching and posting customer payments to the correct open invoices, ensuring the AR ledger reflects true outstanding balances.
Question 3: Which technology is most commonly used to automate the matching of customer remittance advice to open invoices?
- Manual spreadsheet reconciliation
- Optical Character Recognition (OCR) combined with machine learning algorithms (Correct answer)
- Standard relational database queries only
- Manual bank statement review
Correct answer: Optical Character Recognition (OCR) combined with machine learning algorithms
Modern cash application solutions use OCR to extract remittance data from documents and machine learning to match payments to invoices, dramatically reducing manual effort.
Question 4: What is a key advantage of using a cloud-based AR automation platform over an on-premise system?
- Cloud platforms do not require any user training
- Cloud platforms offer faster deployment, automatic updates, and remote accessibility (Correct answer)
- Cloud platforms eliminate all cybersecurity risks
- Cloud platforms do not charge subscription fees
Correct answer: Cloud platforms offer faster deployment, automatic updates, and remote accessibility
Cloud-based AR platforms reduce infrastructure costs, provide automatic updates without IT involvement, and allow staff to access systems remotely.
Question 5: A company wants to reduce unapplied cash on its books. Which technology solution best addresses this?
- Implementing a new general ledger system
- Deploying automated cash application software with remittance capture capabilities (Correct answer)
- Increasing the AR team headcount
- Adopting a paper-based invoicing process
Correct answer: Deploying automated cash application software with remittance capture capabilities
Automated cash application software with remittance capture directly addresses unapplied cash by intelligently matching payments to invoices without manual intervention.
Question 6: What does 'straight-through processing' (STP) mean in the context of AR automation?
- Processing all invoices through a single vendor
- Completing the entire invoice-to-cash cycle without manual intervention (Correct answer)
- Sending invoices directly to customers without review
- Applying all payments to the oldest invoice first
Correct answer: Completing the entire invoice-to-cash cycle without manual intervention
Straight-through processing means transactions flow automatically from invoice creation through payment posting with no human touchpoints required.
CRPA CRPA Technology & Automation in Accounts Receivable 1
What is the primary benefit of implementing Electronic Invoice Presentment and Payment (EIPP) in a receivables department?