Maximizing Operational Performance Through An Order To Cash Software
Receivable Days Outstanding
For Finance Executives looking to drive operational efficiency, selecting the right order to cash software is key. Understanding the various capabilities of O2C solutions is critical component of any successful software implementation. Receivable Days Outstanding (RDO) is KPI which many companies view as hallmark of their operational performance. The right O2C solution can help enterprises to not only monitor their RDO but to also take corrective action to reduce it.
RDO is defined as the length of time between sale and its receipt of payment. it is an important metric as it reflects companies ability to rapidly convert sales into profits. High RDO numbers suggest vulnerability in an organizations operational process, in which customers have an excessive time frame in which to make payments. Low RDO, on the other hand, points to an efficient working capital cycle with quicker payment collection.
For companies willing to invest in an O2C solution which incorporates receivable days outstanding analytics, better visibility into customer payment trends is possible. Not only does this provide comprehensive breakdown of invoices issued and payment received, but it can also highlight any issues with the process or customer data. This enables companies to adjust their approach for higher efficiency.
Apart from improving visibility into customer payments, an efficient O2C solution can automate several key processes. From invoice generation to payment collection, automation helps reduce the labor costs associated with mundane and repetitive tasks, freeing up employeeto handle more important matters.
Data security is another potential advantage of deploying high-quality order to cash system. With heightened awareness of data protection, secure O2C system can be beneficial in maintaining customer privacy.
In summary, properly implemented order to cash solution can drastically enhance operational performance. This is especially true when it comes to tracking RDO and maintaining customer privacy. Investing in the right system and adapting it to fit the companies needs will go long way towards improving companies overall efficiency.
