Getting Started With Order To Cash Solutions: A Executive Guide
Account Receivable Technology
As ubiquitous as an invoice is, they can be tedious if one is managing hundreds or thousands of them each month. Technology offers solution. Receiving payments faster, streamlining processes and saving money can be done through order to cash solutions.
The purpose of this guide is to assist in leveraging technology for Accounts Receivable (AR) to gain more out of Order to Cash (OTC). This document is aimed at Executives from the finance sector who needs an OTC solution.
What Is Accounts Receivable (AR) Technology
The first step is to understand the order to cash process. AR technology plays key role in the quick processing and receival of payments. It touches different stages of the financial supply chain in invoicing and collection activities. Benefits of AR technology involve faster payments, greater cash flows, more efficient business processes and lower costs.
The following are the OTC components:
? Invoicing: Creating and sending out invoices to customers.
? Collection: Setting up payment terms with customers and monitoring payment schedules
? Reconciliation: Processing received payments, matching them with invoices, entering payments into an accounting system, verifying payment accuracy
? Risk Assessment: Making decisions on when to offer payment terms to customers based on their payment histories
? Dispute Management: Identifying or fixing incorrect invoices, missed or invalid payments
Benefits of Order to Cash Solutions
Executives of the finance department are always looking for ways to simplify the payment process and ensure receival of cash flows quickly. Here are some benefits of getting an OTC solution.
? Automation: Automating invoicing and collections processes proves to be an efficient use of resources, and it aids in avoiding errors in manual work.
? Improve Cash Flow: Faster payment is enabled with the automated payment schedule, and streamlining collections operations.
? Accuracy: Extending credit terms to the right customers and avoiding data entry errors through automation.
? Risk Reduction: With effective credit management and risk monitoring, organization can identify high-risk customers and take appropriate actions.
? Lower overhead costs: Automation helps to eliminate the cost of setting up, training of people and other manual entry due to human errors and fraud.
? Increase visibility: Having visibility and stricter process across the entire order to cash cycle would improve the organizations bottom line.
Types of Order to Cash Solutions
Accounts Receivable technology solutions are available in both cloud solutions, and Softwaresolutions.
Cloud Solutions: Cloud-based systems offer great flexibility of being accessible anytime, anywhere. It helps to reduce the cost of owning physical infrastructure and control of having access to the data. Data security is improved with the cloud solutions and automated backups.
Softwaresolutions: Organization can choose to go with software platform for the Accounts Receivable solutions, it helps to keep full control of the data and reduce dependency on third-party cloud vendors. It helps to reduce cost in the long run but requires the cost of software and hardware infrastructure up front.
Getting Started
Organizations opting for Accounts Receivable solutions should work closely with decision-makers to understand their requirements and do thorough analysis of their current OTC cycle. Defining objectives upfront helps to avoid implementing wrong solution.
organizationshould evaluate the solutions offered by different providers. Make sure to look out for features include in the solutions such as payment due date, automated emails, and dispute management. Additionally, they should consider the scalability of the solutions, customersupport and the cost of the solutions. Organizations must also assess the integration capabilities with their technology stack, like to ERP or CRM.
When evaluating solutions, organizations must ask the vendors to provide demonstration of the product, and outline their usage costs. Organizations also need to review legal contracts to keep away from long-term commitments or hidden fees.
Conclusion
Organizations can make use of Accounts Receivable solutions for better cash flow, improved accuracy, and optimized workflow. Order to Cash solutions available in both cloud and software form have their own advantages.
Executives from the finance departmentshould understand the OTC process and the different components of the solutions in the first step. Organizations must assess the solutions from different vendors, evaluate their features, integration capabilities, costs and scalability. Before choosing vendor, organizations must evaluate use-cases and ensure the vendor is offering what you need for your specific requirement. Keeping in check the legal terms and conditions is also essential.
