Opportunity Cost Of Failing To Integrate Credit Management Into Order To Cash
Ar Credit Management
The incentive to attain greater efficiency and for more effective performance in order to remain competitive in global market has driven business of all sizes towards the adoption of digital modernizations and technology. When it comes to financial operations, recent advancements in Softwaresystems has changed the way companies manage their order-to-cash workflows, particularly in their credit management processes.
Not leveraging software as means of managing credit can be extremely detrimental to the business, and often restricts its potential for growth. Without automation, Order-to-Cash cycles can become complicated and can lengthen considerably, thus having direct impact on cash flow and the overall financial performance of the company. In 2019, 60% of the S&P 500 implemented software to address their Order-to-Cash management, highlighting the importance of the technology’s adoption.
The implementation of software into credit management brings an array of advantages and benefits. It offers significantly improved visibility, increased accuracy of data and enables managers to make well informed decisions in real-time. This, ultimately, creates shortened Order-to-Cash cycle, allowing companies to better understand customer behavior, predict their demands, and maintain healthy cash flow.
In addition, software assists in identifying and managing any potential risks, such as delinquent payments and fraudulent payments. Credit managers can deploy data-driven models to score new customer applications quickly, with automated alerts to notify of any discrepancies. Software also provides forecasting capabilities and automation, allowing managers to optimize the approval process, streamlining the process of Order-to-Cash cycles, and reducing the manual effort involved.
Analytics is, perhaps, the most powerful feature of an integrated software. This can tell the organization, in real-time, the performance metrics they need to focus on, as well as providing multi-dimensional analytics that show both trends and exceptions. Moreover, credit managers are able to compare different revenue sources, assess the customer base, and identify what segment of customers are detrimental.
With the level of complexity within Order-to-Cash flows, not taking advantage of software carries variety of risks. Inefficient manual processes can result in inconsistencies, errors and ultimately frustrated customers. Furthermore, companies without an Order-to-Cash management software are vulnerable to cash flow fluctuations, unable to address current growth demands and limit the potential for sustainability.
It is essential for business to understand the value of accurate, up-to-date customer data and credit management processes within the Order-to-Cash cycle. With the potential of software to reduce the risk of human-error, create timely decisions and allow better management of customer accounts, the failure to introduce software is considerable opportunity cost in maximising the customer experience, reducing costs and driving up cash flow.
