Cash Forecasting Risks Without Order To Cash Software
Cash Forecasting Using Dso
As financial uncertainties increase, business across all industries have had to confront the inevitable risk of understanding their cash position. This requires accurate and timely forecasting, especially across their order-to-cash process which is critically important for any given business’ success. Without comprehensive and automated system of software, business face increased risk in all stages of their cash cycle from customer order entry and the invoicing process all the way to collections and payment.
Failures in Cash ForecastingA primary risk factor when attempting to forecast cash without the proper software is errors and inaccuracies. Incomplete customer records or inaccurate customer data can leave unaffected areas requiring additional manual entry or corrective means. Without system to track account performance and inform successive processes, an effective cash forecast can’t be confidently predicted.
Negative Market Sentiment Equally impactful, lack of complete and timely data can create inaccurate predictions of the market sentiments, potentially leading organizations to make the wrong decisions when it comes to their financial future. Without having consolidated platform from which to view order and payment data, companies are unable to sufficiently understand their current position, and how future events will affect it. As result, the risk for organizations to make the wrong financial decisions, or have their decisions uncover higher costs down the line increases.
Customer Relationships and Business OutcomesCash forecasting, particularly in software-less environment, can lead to negative customer experiences, factor that can have direct impact on business outcomes. Without the ability to assess customer payments, companies can’t adjust their customerspecific preferences, further affecting the customer experience. Additionally, as manual processes are relied on instead of tailored software to meet customer needs, repetitive ordering and shipping delays can ensue, resulting in frustrated customers and ultimately decreased business retention.
Outdated Methods and ReportingNot to mention, outdated reporting techniques can leave companies unable to exploit greater visibility and insights. Reports such as customerstatements, finance statements, and reconciliations must factor in the customers order-to-cash cycle, as well as payment cycles. Without software enabled system, these tasks are often overlooked and decisions are made without taking into account customer data.
Manual Processing and Increased Cash Flow RiskSoftware-less forecasting further increases the risk of manual data entry and manual processing. This delays cash collections significantly, making it difficult for organizations to accurately predict their cash flow. Not to mention, manual processing increases the possibility of slip-ups and oversights, expensive mistakes that can severely damage an organizations bottom line.
ConclusionSoftwaresupporting the order-to-cash cycle is highly recommended in order to accurately forecast cash and to fully understand customer information. Without it, business are left with the risk of degraded customer relations, outdated reporting methods, data entry oversights and inaccuracies, and an inability to learn from customer patterns which can cause costly cash flow delays and inaccuracies.
