Eliminating Receivables Roadblocks Through Order To Cash Solutions
Managing Account Receivables
Account receivables are integral to any business, and effective methods of administration are essential to ensure efficient operations. companies ability to effectively manage accounts receivable directly affects its financial health, bottom line and customer relationships. Flawed or delayed processes can often lead to an inability to generate invoices promptly, incorrect payments, bloated receivables and credit control issues. For CFOs and finance departments, the risk of lost or delayed payments and churning accounts receivables can lead to extended payment cycles and adverse customer relations.
An order-to-cash solution, or OTC, is Softwaresolution designed to streamline and automate companies accounts receivable processes. Often, OTC software is integrated with companies existing businessestems, such as its customer relationship management or enterprise resource planning, helping CFOs and finance departments create smooth operating procedures. In addition to helping organizations streamline their receivables processes, order-to-cash software allows an organization to gain greater insight and control of the entire accounts receivables cycle.
As with any business transformation, there are significant considerations that need to be addressed. The journey will include stakeholder engagement, questionnaires, process reviews, platform selections and implementation development, but with the right balance, it can be rewarding experience. Below is step-by-step guide for organizations planning to implement an order-to-cash solution.
1. Identify Objectives: It is important to map out the current business process, determine areas of improvement and define objectives for the new system. For instance, organizations might be looking to reduce delinquency, shorten payment cycle time, gain greater control over data, or integrate systems.
2. Engage Stakeholders: Taking the time to talk to internal stakeholders will help identify all areas of the business, sources of data and requirements for the new system.
3. Review Key Metrics: Focus on key metrics like average number of invoices per customer, average debtor days, collection efficiency and payment method acceptance. Identify variances between different customer types and regions.
4. Analyze Needs: Next, identify the functional, business process and technological requirements for the new system. Consider how the chosen solution can improve customerservice, reduce receivables and provide visibility into current trends and opportunities.
5. Platform Selection: By now, organizations should have good understanding of the current process and necessary objectives for the new system. It is now time to identify vendors who meet the requirements and assess their solution.
6. Create an Implementation Plan: Once the platform has been selected, create detailed implementation road map for the chosen Softwaresolution.
7. Train Personnel: Train personnel to ensure the solution is used correctly and efficiently. This involves training individuals on the platform, as well as on new procedures and processes.
8. Monitor and Optimize: Set up governance and maintenance processes to ensure the system is optimized over time. Monitor the system to identify inefficiencies, process gaps and opportunities to improve.
Implementing an order-to-cash system is not without its challenges. It is complex and involved process, one which requires careful selection and implementation. However, when successful, the potential benefits can be significant. Organizations can experience improved customer relations, lower levels of debt, more accurate invoicing and greater control over data. An Order-to-Cash system is great option for finance departments looking to improve the efficiency and accuracy of their accounts receivable processes.
