The Benefits Of An Order To Cash Solution
AR ACCOUNTING
Increasingly, corporations and organizations of all sizes are looking to modernize their accounting solutions in order to ensure smoother operation and improved accuracy. There are variety of solutions available, ranging from enterprise-grade, full-service solutions to more streamlined, cloud-based solutions. An Order to Cash (OTC) solution is cloud-based solution that helps streamline the entire cycle of purchase and sale, from order inventory management and customer invoicing to payment collection and vendor refunds.
As the complexities of the accounting world continue to grow, an OTC solution provides both operational and financial benefits for the corporate and organizational level. On the operational level, an OTC solution can automate and integrate data from multiple sources including ERP, General Ledger, CRM, and payment processing applications. This streamlines and simplifies the process by providing unified view of data and equips C-suite executives with greater visibility into the accounts receivable process.
On the financial level, an OTC solution significantly reduces manual labor and errors that often plague spreadsheets and manual collection efforts. Automation allows for faster payment collection, improved accuracy and flexibility, improved reconciliation and auditability of accounts, while at the same time, reduces time and labor on back end collections and reporting. The data integrity and traceability provided in OTC solution eliminates the inconsistencies associated with manual entry. All in all, using an OTC solution provides more cost effective, accurate, and efficient way of managing and optimizing accounts receivables.
In addition to these benefits, OTC solutions provide valuable insights into customer behaviors and trends. This enables businesses to better understand their customers, both in terms of their overall spending habits, when they typically pay their invoices, and if their invoice is overdue. This data can then be used to strategically improve cash flow, influence customer decisions, and improve the customer experience overall.
To best implement an OTC solution into the accounting workflow, corporate and organizations should consider the following steps:
1. Prepare the Data: Before you can begin the process, you must ensure that all data is properly backed up and organized. Legacy data must be converted into format suitable for use in the OTC software.
2. Configure the System: Though the steps may vary depending on the specific solution, you will need to configure the system by setting up user accounts, mapping accounts, and setting up any payment processing gateways that may be in use.
3. Set Up Policies: Policies must be established for tracking customer credit and invoice payment, determining billing schedules and payment cutoff dates, setting discounts and invoicing terms, and establishing collections procedures.
4. Generate Reports: Reports should be generated to help better analyze customer spending and payment habits as well as for tracking invoice payments and collections.
5. Automate Processes: Finally, processes should be automated, including generating invoices, tracking invoices and payments, reconciling accounts, and customizing collections process.
In conclusion, an Order to Cash (OTC) solution is an invaluable tool for any corporate or organization. Not only does it provide operational and financial benefits across the organization, but it provides valuable insights into customer behaviors and trends. By streamlining and integrating data, OTC solutions reduce friction and increase accuracy, while at the same time, saves time and labor. Best of all, they can be implemented in variety of settings. With the right guidance and preparation, OTC solutions provide an efficient and cost effective way of optimizing accounts receivables for any organization.
