· Reviewed by Nimra Khalid
What is cash application?
Cash application means matching money received from customers to the invoices it pays and recording that in the accounting system. It covers bank receipts, checks, lockbox files, card payouts and remittance advices, including partial payments, deductions and payments with no reference. Done well, the aging is accurate and no customer is chased for an invoice they already paid.
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Cash application: what we do and how it runs
Cash application means matching money received from customers to the invoices it pays and recording that in the accounting system. It covers bank receipts, checks, lockbox files, card payouts and remittance advices, including partial payments, deductions and payments with no reference. Done well, the aging is accurate and no customer is chased for an invoice they already paid.
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What it is
Cash application means matching money received from customers to the invoices it pays and recording that in the accounting system. It covers bank receipts, checks, lockbox files, card payouts and remittance advices, including partial payments, deductions and payments with no reference. Done well, the aging is accurate and no customer is chased for an invoice they already paid.
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What you get
Every receipt matched to its invoice within one business day
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How it runs
Unapplied cash worked until it is below 1% of receipts
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Discovery call
A 20-minute call to map how money arrives: bank accounts, lockbox, card processors, payer remittances and customer portals. We note your deduction and write-off rules.
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A named accountant, a backup and a team lead
Inside your own software, on a fixed close calendar, with a reply from a person within 1 business day. Call +1-657-777-0006 or start a quote.
Get a custom quote 06 / 06
Who it is for
Businesses with many small receipts
Distributors, subscription companies and clinics receive dozens of payments a day, often without a clear reference. Matching them by hand eats a bookkeeper's morning and still leaves a pile of unapplied cash.
Healthcare and home care agencies
Payer remittances arrive as ERA files and paper EOBs with adjustments and denials. You want each remittance posted line by line so the patient or payer balance is right.
Finance managers
Your AR aging is wrong because payments sit unapplied or applied to the wrong invoice, and customers are chased for invoices they paid. You want the sub-ledger to be trusted again.
What's included
- Daily matching of bank receipts, checks and wires to open invoices
- Lockbox and bank remittance file import and posting
- Card processor payouts split into invoices, fees and refunds
- ERA and EOB remittances posted by claim line for healthcare clients
- Remittance advices read from email, portals and PDF attachments
- Partial payments, deductions and short pays coded with a reason
- Unapplied and unidentified cash worked daily until resolved
- Customer overpayments and credits identified for refund or offset
- Payments on account allocated once the customer confirms
- Exception log with owner and next step for every unmatched item
- AR sub-ledger tied to bank and general ledger every month
- Weekly unapplied-cash and deduction report
Deliverables and KPIs
| Deliverable | KPI we report | Cadence |
|---|---|---|
| Receipts applied | Every receipt matched or logged as an exception within 1 business day | Per invoice |
| Unapplied cash | Unapplied and unidentified cash below 1% of monthly receipts | Weekly |
| Deduction log | Every short pay coded with reason, amount and owner | Weekly |
| Remittance posting | Lockbox, ERA and processor files posted the day they arrive | Per invoice |
| AR to bank reconciliation | Receipts in the sub-ledger tie to bank deposits with zero unexplained variance | Monthly |
| Cash application report | Match rate, unapplied balance and deduction totals with month-on-month movement | Monthly |
KPIs are what we measure and report, agreed per engagement. Service-level commitments are set in your agreement.
How it works
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Discovery call
A 20-minute call to map how money arrives: bank accounts, lockbox, card processors, payer remittances and customer portals. We note your deduction and write-off rules.
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Access and backlog review
You grant accountant access to your ledger, read-only bank feeds and remittance sources. We review the unapplied balance and open items and hand you a cleanup plan within 48 to 72 hours.
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Dedicated specialist assigned
A named specialist, a backup and a team lead take over daily posting. The backlog is cleared first, then daily matching begins on the ReconBot workflow with its exception log.
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Daily posting and monthly tie-out
Receipts are applied each day, exceptions are chased, and each month the AR sub-ledger is tied to bank and general ledger under our Two-Tier Review.
Software we work in
How much does cash application cost?
Cash application is priced per receipt or remittance line for high-volume businesses, or as a share of a dedicated specialist's time where remittances need reading and judgment. There is no setup fee and engagements run month-to-month. Pricing depends on volume and scope, so we send a custom quote within 1 business day.
What moves the quote
- Monthly receipt count and how many arrive without a clear reference
- Number of bank accounts, lockboxes and card processors to post from
- Whether ERA, EOB or portal remittances need line-level posting
- Deduction and short-pay volume and the research each one needs
Market benchmarks
| Market | Typical range | Source |
|---|---|---|
| US | Dedicated offshore accounting and AR staff $8 to $35 per hour all-inclusive; US-based $40 to $75 per hour; in-house bookkeeper $6,000 or more per month loaded | Madras, Acculink, Rose Talent; RadCity, UseCalcPro (2026) |
| UK | Bookkeeping support £20 to £55 per hour; per-transaction pricing £1 to £2 | UK provider pricing surveys (2026) |
| Australia | Bookkeeping support A$40 to A$100 per hour; offshore data entry A$25 to A$60 | Australian bookkeeping fee surveys (2026) |
Third-party ranges for orientation, not our prices.
Get a custom quote No setup fee. Month-to-month.
Cash application for your industry
Case study
14 months of payouts reconciled
Case studyReconciling 14 months of Shopify and Amazon payouts
An online retailer in the northeastern US sold through its own Shopify store and on Amazon. Deposits landed in the bank as lump sums net of fees, refunds, chargebacks and reserves, and the owner had been booking each deposit as sales. Fourteen months in, the books showed revenue that matched neither platform report, and the retailer's tax preparer would not work from them. The owner engaged LedgerBPO for payment-processor reconciliation, e-commerce accounting and catch-up bookkeeping. A named accountant, a backup and a team lead reconciled every payout for the 14 months back to the settlement reports and the bank, then put a monthly routine in place so the gap did not reopen. This ecommerce bookkeeping case study covers the first three months of payout reconciliation.
- Months of unreconciled payouts140
- Sales channelsShopify and Amazon, unreconciledShopify and Amazon, reconciled monthly
Security and compliance
- Read-only bank feeds and remittance access; we post to the ledger and never move money
- HIPAA-trained staff and a signed BAA where remittances contain patient data
- MFA on every login, least-privilege roles and a per-client access log
Full control list on the security page and country rules on the compliance page. Certifications are listed only when held.
Frequently asked questions
How much do cash application services cost?
Pricing depends on volume and scope, and we send a custom quote within 1 business day. High-volume receipts are usually quoted per remittance line, while remittances needing research are quoted as a share of a specialist's time. As a market reference, dedicated offshore accounting staff run $8 to $35 per hour all-inclusive, against $40 to $75 per hour US-based (Madras, Acculink, Rose Talent, 2026).
What counts as unapplied cash and why does it matter?
Unapplied cash is money received but not yet matched to an invoice, so it sits as a credit on the customer account or in a suspense account. It overstates what customers owe, triggers reminders for invoices already paid, and hides overpayments. We work it daily so it stays below 1% of receipts at any month-end.
Can you post payments from a lockbox or bank file?
Yes. Lockbox files, bank remittance exports and BAI or CSV downloads are imported and matched daily. Items without a reference are researched against customer, amount and recent invoices before being logged as exceptions. We set the import schedule to match your bank's file delivery.
How do you handle short payments and deductions?
Each short pay is coded with a reason: pricing, freight, damaged goods, early-payment discount, tax or unknown. The invoice is left open for the difference, the deduction is logged with an owner, and the pattern is reported monthly so recurring causes can be fixed at the billing stage. You approve any write-off.
Do you post healthcare remittances such as ERA and EOB files?
Yes. For clinics, home care and DME clients we post ERA files and paper EOBs by claim line, including adjustments, denials and patient responsibility. Staff are HIPAA-trained and we sign a BAA. Denials are listed for your billing team or for our medical billing service to work.
Which systems do you apply cash in?
QuickBooks Online, Xero, NetSuite, Sage Intacct and Bill.com receivables, plus payouts from Stripe, PayPal and Square. If your remittances arrive through a customer portal or a lockbox provider, we read them there and post to the ledger. Nothing is moved to a system of ours.
How does cash application fit with AR follow-up?
Cash application keeps the aging accurate so follow-up chases only what is truly owed. Many clients run both: our accounts receivable service works the aging while the cash application specialist posts receipts and clears exceptions. Payment processor payouts with fees and refunds are covered by our payment processor reconciliation service.
What happens with payments we cannot identify?
They are posted to unapplied cash for the customer if the payer is known, or to a suspense account if not, and go on the exception log the same day. The specialist checks remittance emails, portals and recent invoices, then contacts the customer's accounts team in your name. Items still open at month-end are listed for your decision.
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