Risks Of Not Automating Receivables
AUTOMATED RECEIVABLES
The Order to Cash (OTC) cycle is an essential component of efficient financial management for any business. Companies that lack an automated system for managing receivables risk being burdened by inefficient processes and disorganization. By taking into consideration few of the key risks of not automating receivables, executives can make an informed decision about investing in an advanced software solution.
The principal risk of not investing in OTC automation is the potential for increased human errors. Data entry mistakes are common without digitized receivables system, leading to delays in reconciling accounts, bad record-keeping, and misallocated funds. These errors can strain the relationships between businesses and their clients, and ultimately result in loss of revenue.
Furthermore, manual receivables process can leave organizations faced with inefficient training and onboarding protocols as they continually have to hire and train new staff to manage the influx of payments. This inherently increases the risk of mistakes and errors in the receivables process. Automation can reduce the time, expense, and risk of making mistakes associated with the onboarding of staff to handle the order to cash process.
Another key risk associated with not automating receivables relates to visibility into the accounts. Tracking receivables in an automated system provides company with instant insight into which clients are up to date on payments and which may need to be invoiced again or have their payment arrangements modified. With manual record-keeping and filing, this is much more difficult to assess. Automation can also help executives quickly discern when issues arise during the OTC process.
When left unchecked, businesses manual receivables process can significantly hamper its agility and responsiveness. Companies may miss out on the potential for business growth due to lack of proper visibility into their receivables. This can cause unnecessary delays with client invoices, resulting in more cumbersome process and negated opportunities for growth. Automation can reduce the manpower required for invoicing and help to ensure that the process occurs quickly, extending business’ time horizons.
In summary, the benefits of automating receivables can be seen in increased efficiency and decreased risk. By comparison, manual processes often result in slower business cycles, increased human errors, and an inability to keep pace with the changing demands of the market. Investing in OTC automation is key for business executives looking to ensure that their organizations remain competitive.
