Risks Of Ignoring Cash Collections Software
CASH COLLECTIONS SOLUTION
The age-old adage ‘time is money’ rings true, particularly when it comes to the order-to-cash process. Without specialized software system in place to manage the customer payment cycle, businesses are exposed to variety of risks that can have significant impact on revenue and customer relationships.
C-suite executives must consider the risks of forgoing cash collections software in order to protect the companies bottom line in the long run. Here are the primary risks of failing to employ software in the order-to-cash cycle:
Poor Cash Visibility
Manually tracking accounts receivable data is both time-consuming and labor-intensive. Furthermore, manual processes can lead to processing inefficiencies such as data entry errors and incorrect calculations. The inaccuracy and lack of visibility into the companies receivable portfolio can lead to poor customer experience, missed payment deadlines, and inaccurate cash flow projections. Additionally, without real-time view into the entire order lifecycle, businesses risk extended resolution times, customer dissatisfaction, and ultimately high customer churn.
Inadequate Remittance Tracking
Without software system in place, it can be difficult to ensure that companies can effectively track payments and remittance information over the entire order-to-cash process. Manual data entry can cause inaccurate postings and affect cash flow accuracy. Moreover, without software solution, consistently tracking customer payments and adjusting ledgers appropriately is often missed.
Lack of Automation
Software provides high degree of automation that helps companies reduce manual processes in the order-to-cash cycle. Without software, companies are stuck with manually creating invoices, reconciling payments, and reporting financial information, while also dealing with customer inquiries, chasing payments, clearances, and remittances. Additionally, without an automated system, companies miss out on business process automation opportunities such as real-time management of the order-to-cash cycle. Automation increases working capital and optimizes accounts receivable activities.
Risk of Fraud
Without the proper payment system in place, customers can take advantage of gaps in the order processing system for fraudulent purposes. Subpar payment processes also increase the risk of fraud due to delayed activity. Without software solution, invoices can be fraudulently manipulated and payments signed off without proper authentication in the order-to-cash process.
Accounting Errors
Without software tracking customer payment information, businesses can struggle with costly accounting errors. It can be difficult to accurately reconcile customer accounts due to lack of support for regulatory compliance and the ability to quickly update accounting records. Without an established proper order-to-cash audit trail, businesses can experience difficulty in keeping up with changes in payment regulations or dealing with additional policies and procedures.
By failing to implement software in the cash collections process, companies leave themselves exposed to variety of risks that can have harmful effect on their business goals, customer relationships, and bottom line. To maximize working capital and keep up with the pace of business, C-suite executives must consider proactively investing in software to improve their order-to-cash process and eliminate operational bottlenecks.
