Guide To Automation In Deductions Management
Automation In Deductions Management
Increasingly, organizations are leveraging technology to streamline their order to cash processes, making them faster and more efficient. Automation of deductions management is one example of this trend enabling staff to process and handle high volume of deductions in more robust way.
The automated deductions management process involves several steps, the extent of which depends on the software chosen, and it requires an organized approach. It is essential to select the right Order to Cash (OTC) software to provide the flexibility and scalability organizations need. With the right software and defined strategy, business can realize the full benefit of automating deductions management in their accounts receivable processes.
To help business get the most out of deductions management automation, this article offers step-by-step guide on how to use well-designed OTC solution.
Step 1: Understand the Capabilities of the OTC Solution
An effective OTC solution must be able to automate variety of deductions-related activities. The Softwareshould offer flexibility so business can customize their processes to their specific requirements, such as the ability to define proper automated rules for recognition and routing of deductions. comprehensive OTC solution provides centralized platform for preparing, tracking, and resolving deductions. It also helps identify potentially fraudulent deductions that are out of compliance with internal policies or regulations.
Step 2: Define the Criteria for Automation
Once the OTC solution is understood, the next step is to outline the criteria for automatic deduction recognition and successful routing of deductions. This includes setting the parameters for the deduction types and shipping deductions, payment terms, and GL codes which must be determined to guide the automation process. Organizations can also define which roles should receive notifications of the deductions and when, thus ensuring accurate processing and prompt resolution.
Step 3: Collect Business Data
It is important to make sure that the data collected is complete and accurate. The OTC solution should provide tools to facilitate fetching data quickly, accurately, and completely. single-read process should be able to fetch business activity such as supplier data, customer information, ledger postings, credit exposures, and invoices, to name just few.
Step 4: Automatically Recognize and Classify Deductions
Once the data is collected, the OTC automation solution should automatically identify and recognize the deductions. Real-time electronic postings should be possible, supported integrated workflows. The OTC should have the capabilities and flexibilities to detect, flag, or even reject mismatch or fraudulent deductions, protecting and safeguarding organizations from losses.
Step 5: Automatically Routing Deductions
For efficient deductions management, the OTC automation should route the deductions to the right people for review and approval. The solution should offer additional features such as automated workflow determination, notifications, alerts, and user-defined business rules to ensure efficient routing. An automated rules engine should enable the solution to learn and modify the workflows and processes according to the defined criteria.
Step 6: Evaluate the Results
The last step is to evaluate the results of the automation process and make sure that the deductions are accepted and posted to the ledger without any errors. To verify the accuracy and success of the process, the OTC solution should also provide comprehensive reporting capabilities. This will enable organizations to gain better visibility into their deductions management processes and take necessary proactive steps to adjust the criteria for automation or improve their deductions processes, if needed.
Conclusion
Automation of deductions management provides organizations with the ability to handle larger number of deductions accurately and within shorter time. Robust and comprehensive OTC solutions can provide centralized automated platform for the recognition, classification, and routing of deductions. By following the steps outlined in this article and leveraging the right OTC software, business can realize the full benefit of automation in deductions management.
