Accounts Receivable Risk Without Software
Assessing Your Accounts Receivable
The purchase of order to cash software can enhance operational efficiency, reduce costs, improve visibility, and maximize cash flow. From financial executive’s perspective, the risk of not using such software is considerable. The possibility of human errors, poor routing practices, manual compliance processes, and lack of uniform financial platform can be costly, particularly in an increasingly digitized economy.
When an organizations accounts receivable (AR) goes unchecked, it is highly vulnerable to invalid orders, delayed payments, and discrepancies in invoices. Discrepancies can arise in pricing, quantity, discounts, or any other items that would be included in the original estimate or terms of purchase. Without software to accurately calculate the amount due from customers, invoices may show incorrect figures and present higher risk of not recovering sums owed. As well, since errors can occur in any process step, from receiving to invoicing, the lack of single AR platform can add significant delays in the collection of payment and result in cash position shortfall.
Organizations that rely solely on manual processes for their accounts receivable can also be subject to non-compliance. Electronic records, such as invoices and receipts, must conform to local and industry regulations. While technological advances have simplified many compliance requirements, there are still variety of rules that need to be adhered to in order to ensure compliant operations. Failure to do so can result in costly penalties and litigation.
The risk of not having unified financial platform is just as critical. business that use outdated methods to administer their AR are often unable to detect and address delinquent accounts in timely manner. Without reliable data insights, it can be difficult to assess customer health, manage discounts, allocate resources, and track payments or discrepancies. As such, organizations stand to lose out on potential revenue growth and profitability opportunities.
Overall, the cost of not using software in the order-to-cash process can be detrimental to any organization. When the AR is managed manually, there is greater risk of making errors and missing out on compliance requirements. As well, without unified platform, financial executives are more likely to miss out on potential revenue and profitability opportunities. Investing in order-to-cash software is choice that can save organizations time, money, and effort while providing the guidance needed to drive businessuccess.
