Optimizing Operational Performance Through Software For Deduction Management
DEDUCTION MANAGEMENT BEST PRACTICE
Within the order to cash process, effectively managing deductions is vital in order to maintain optimal operational performance. Achieving the highest level of savings requires having the right tools and processes in place, meaning relying on software for deduction management best practice becomes priority for finance executives.
Software solutions now makes deduction management far more efficient and effective, by allowing organizations to easily capture and collect data, investigate and analyze deductions, trigger automation options, and allow for centralizing of the order-to-cash process. By implementing software for deduction management, finance executives can effectively monitor and control the accuracy of data and ensure the timely resolution of deductions.
For the organization to realize gains from the adoption of software, there are several best practices to bear in mind:
Data Acquisition and Integration
Crucial to the accuracy and efficiency of the deductions management process, is the quality of the data and the manner of integration. It is essential for finance executives to ensure data is collected and stored in one place for ease of access and accuracy. To do this, software should allow easy integration of data from both internal and external sources including customers, suppliers, accounts receivable and accounts payable. Software should also allow finance executives to control and centralize data by capturing all transactions that interact with certain deduction at the same time, across all the impacted systems.
Risk Based Analysis
The clunky and slow process of deductions management can often result in financial inefficiencies, caused by discrepancies between the resolution of deductions and the associated funds from those deductions. Risk based analysis provided by software solutions, can assist the finance executive in uncovering fraud and duplicate deductions, thereby helping to free up previously tied-up refunds.
Automation
To become more efficient, organizations should consider automating deductions with development of an automated process framework. This requires identifying recurring patterns between multiple deductions and automation of deduction resolution by allowing software to apply the identified pattern or template when deductions arrive. Highly advanced solutions, now allow automation of deduction scoring, in order to prioritize deductions against their potentially financial, legal, or commercial impact on an organization.
Communication
Another important feature that software solutions offer, is the ability to allow finance executives to communicate both internally and externally with the stakeholders related to particular deductions. Producing customizable reports, utilizing centralized platform, allows finance executives to track action items, view and analyze data related to deductions, and provide better platform for consolidating communication for both parties.
By implementing the right software for deduction management, finance executives can easily handle the coordination, reporting and management of deductions, ensure more efficient and accurate process, and realize more effective cash flow. By utilizing the best practices mentioned, finance executives can maximize the value of their deduction management process, guarantee better control and visibility over the order-to-cash process and simultaneously reduce their financial risks.
