Improving Receivables With Automated Customer Deductions Solution
Customer Deductions Impact On Receivables
C-Suite executives in finance have great opportunity in improving their receivables processing with an automated customer deductions solution integrated into their order-to-cash (OTC) software. Automated customer deductions solutions enable organizations to quickly and accurately manage deductions taken against invoices by customers, significantly reducing manual effort required to post debit and credit adjustments against invoices. With automated posting of debits and credits, finance departments are able to increase efficiencies in reconciliation and cash-applied processes, reducing manual effort traditionally associated with deductions and applying of payments.
From an Executive PerspectiveThe executive’s main concerns regarding an automated customer deductions solution, should be towards how this solution positively impacts the organizations receivable management. With automated deductions processing, executives can look forward to better and more accurate tracking of customer deductions, ensuring timely resolution and improved cash application. As remittances for invoices become more consistent, executives can expect more customers to take advantage of early payments, giving their organization combination of timely remittance and improved cash flow. The ability to speed up the deductions-to-cash cycle helps executives keep their organizations cash position healthy, essentially helping executives in keeping their financials and receivables in order.
The Benefits of Automated Customer Deductions
The main benefits of automated customer deductions are speed, accuracy and improved receivables. Organizations implementing automated solutions for customer deductions can expect to realize the following advantages:
Speed: Automated customer deductions solutions drastically reduce the amount of time associated with processing deductions related to invoices, such as returns, short-paid and partials. By automating the posting of debit and credit adjustments to invoice lines, organizations reduce time spent in data entry, saving them from hours of tedious manual labor.
Accuracy: Automated solutions enable accurate and traceable deduction postings, reducing the risk associated with posting errors. Organizations gain control of the process and visibility to help enable proactive resolution for all deductions in the pipeline.
Receivable Management: Automated solutions help organizations improve their receivable management. By reducing manual effort and quickly resolving deductions, organizations can reduce the amount of time customers owe and improve cash flow.
Using the SolutionOrganizations implementing an automated customer deductions solution for their receivables processing should consider the following steps:
1. Obtain needed information: It is critical that the organization gathers all necessary information to ensure timely resolution. Examples are customer/invoice/adjustment information, as well as required business rules and validation logic.
2. Acquire solution: Once the needed information has been gathered, the organizationshould acquire solution that meets its requirements.
3. Configure Test: Configure the solution within the OTC software according to the organizations needs and preferences. Perform testing to ensure accuracy.
4. Integrate with Enterprise Systems: Integrate the automated customer deductions solution with the organizations other enterprise systems, especially financial systems, for seamless communication and coordination.
5. Process Automated Deductions: Begin data collection and processing of automated customer deductions.
6. Monitor Evaluate: Monitor performance using available tools and evaluate the impact on the organizations receivables.
ConclusionWith the implementation of an automated customer deductions solution, organizations can achieve improved receivable management, faster deductions posting, and increased accuracy. Executives have the perfect opportunity to leverage automated customer deductions for their organizations order-to-cash (OTC) software in order to improve their organizations cash flow performance, reduce manual effort associated with deductions, and improve accuracy of resolutions.
