Cash APplication Solutions: A C-Suite’s Perspective
Right Cash Applications Solution
The content of Finance Departments is invariably tied to the Order to Cash Cycle, which involves the process of obtaining, approving and collecting revenue from accounts receivable. The efficacy of the process is paramount to any organization wishing to minimize revenue leakage and subsequently improve their cash flow. Cash application is an essential component of the Order to Cash Cycle and typically involves the application of payments received to the individual invoices. Failing to accurately and efficiently apply payments can result in decrease in sales, along with an overall decline in cash flow.
In recent years, there has been dramatic increase in the development of Softwaresolutions that are integrated within the Order to Cash Cycle, and the emergence of advanced cash application solutions has come to the forefront of the technological landscape. Cash Application solutions enable organizations to reduce the costs associated with manual reconciliation, minimize late payments, and provide prompt access to funds. As with any solution, however, executives must consider wide range of factors before selecting the ideal cash application solution for their organization.
Implementation Considerations
Executives must evaluate the existing infrastructure while selecting their desired cash application solutions. Companies that are inclined to pursue bespoke solutions can acquire exclusive access to their own proprietary solution by submitting request to specialized vendors. Unfortunately, many vendors’ products may be inadequate with regards to the organizations requirements or the product specifications may not be available with the vendor.
Organizations that are unable to develop their own solutions must instead select among the solutions advertised by various vendors. It is essential for the executives to access the background of the prospective vendors, review their service agreements as well as research the quality of their current solutions. Furthermore, the executives must ensure that the selected solution is compatible with the existing applications and that the implementation of the solution is feasible.
Branching Strategies
Executives face major decisions when branching their solution due to the complexity of their overall system. core feature of Order to Cash Cycle solutions is their ability to facilitate data integration. This capability enables executives to reduce the time and complexities of the data loading processes. Additionally, executives can access integrated analytic tools, or even third-party BI systems.
Moreover, cash application solutions enable executives to design their branching strategies around their clients’ accounts and provide key stakeholders with reduced wait times regarding the approval of payments. Executives gain the flexibility to offer their customers wide spectrum of payment preferences and refine the process of collections.
Cost Analysis
The cost of developing or acquiring cash application solution is often major deciding factor for executives. Coincidentally, the cost of solution depends largely upon the resources available and the vendors used. Additionally, executives must take into consideration the cost of the future maintenance of the solution. This can include the it istaff wages, hardware/software replacement costs, and any charges incurred due to upgrades.
Finalizing Selection
The ability to accurately assess one’s organizational needs is pivotal to the successful selection of cash application solution. Executives must diligently analyze their requirements and the features provided by various vendors. It is advisable for the executives to access their vendor’s background and compare their product’s capacities with their organizations infrastructure. Executives must finalize their selection by executing comprehensive cost analysis and predicting the scope of their future investment. Furthermore, they must also consider deploying testing cycle to ascertain the efficacy of their solution.
Conclusion
Order to Cash Cycle solutions have proved to be invaluable for organizations all across the globe, and the cash application, or Payment Optimization Solutions, have become core element of the process. While selecting their ideal system, executives must consider the infrastructure, branching and cost analyses, with the proper guidance and assistance of experts in the industry. Cash application solutions not only optimize the existing workflow but also provide prompt access to funds and facilitate data integration. By optimizing their workflow, executives can ensure their organization remains at the top of their respective industry’s rankings.
