Driving Sustainable Cash Flow Through Software Solutions
Average Dso By Industry
Cash flow management is critical task of any Finance Executive. Despite the importance of cash flow, many companies have not yet implemented proper Softwaresolutions which would allow for maximum forecasting accuracy and timely, optimized order to cash cycle. Without such measures, companies are at risk of sustaining much higher average DSO than that of their industry peers.
One of the most effective and efficient ways for Financial Executive to maintain healthy and optimal cash flow without significant overhead is to invest in sophisticated Softwaresolutions which streamlines all processes involved in an order-to-cash cycle. With that being said, more organizations must begin to understand the implications of leaving their cash flow management to manual processes and untested Excel models. Doing such can have dire repercussions in tangible and intangible components alike.
The tangible components are such that lack of automation can lead to much higher average DSO. This is due to number of factors such as delayed customer payments, lack of proactive cash flow management, and poorly organized processes in accounts receivables. Without optimized Softwaresolutions in place, cash flow management efforts are often crippled, leading to much higher DSO for the organization and much lower rate of returns on investments.
On the intangible side, the consequences of refusing to invest in high-end Softwaresolutions will have ripple effect which touches every corner of the organization. Untested solutions, amateur forecasts, and outdated processes will lead to breakdown in the trust and efficacy of the Finance department. Customers may begin to doubt internal systems and employeemay become disenfranchised in the process, leading to inefficient resource allocations, wasted time, and customer dissatisfaction.
Ultimately, an investment in sophisticated order-to-cash software will lead to increased forecasting accuracy, better customer relations, and more efficient resource allocation. These solutions not only provide significant tangible benefits such as saved costs and improved returns, but also promote an intangible sense of collaboration and trust among Finance personnel, customers, and internal staffalike.
At the end of the day, the importance of stable and comprehensive cash flow system cannot be overemphasized. If organisations continue to struggle with their manual solutions, they simply cannot hope to match their industry’s best practices. By investing in order-to-cash software, Financial Executives can aim to secure their organizations sustainable cash flow and long-term success.
