Maximizing Receivables Collections Using An Automated Order To Cash Solution
What Is Collection Process In Account Receivables
The modern business climate has seen dramatic shift in the higher standards for speed, accuracy, and customerservice. Every day brings new challenges for the finance department when it comes to streamlining the order to cash process. Automation of the process can ensure efficiency and accuracy that allows for the most up-to-date and comprehensive financial insight. The greatest gains come from implementing automated solutions in the collection process within accounts receivable.
In the order-to-cash process, collection is the task of ensuring the timely payment of due invoices by customers. Collection processes can take variety of forms, such as manual communication, phone calls, emails, dunning letters, and verbal agreements among others. To maximize receivable collections, it is critical to understand how an automated order-to-cash solution works and how it can assist in managing the entire collection process.
Step 1. Determine How Long Owned Invoices Should Remain Open
The first step in implementing an automated order-to-cash solution is to determine how long owned invoices (outstanding invoices) should remain open. Defining the opening settings is essential as it allows business to determine when the system should automatically trigger collection activity. good starting point for setting the terms of invoices is to consider industry standards and any regular customer payment patterns.
Step 2. Establish Different Collection Strategies
Once the open settings have been established, businesseshould then set up different collection strategies. This includes defining range of different parameters, such as which collection activities should be used, what communication should take place, and when those collections activities should be launched. This can ensure that the collection process becomes automated and that no manual effort is required to launch collection activities.
Step 3. Automate Communication
An automated order-to-cash solution should provide business with the capability to automate all communication surrounding the collection of outstanding invoices. This can include sending follow-ups and reminder notices via email, as well as dunning letters and any other communication that fits with the defined collection strategies. Automation allows business to get their messages out on time and with complete accuracy.
Step 4. Monitor and Track Progress
Automation also allows business to monitor and track the progress of the collection process. This can include tracking how the receivables behave over time and ensuring that the right actions are being taken at the right time. This real-time monitoring of the accounts receivable can reveal unseen trends and patterns that can be utilized to improve the collections process.
Step 5. Follow Up in Real-Time
To maximize collection success, it is essential to follow up in real-time with customers to ensure that due obligations are met and any open invoices are cleared. An automated order-to-cash solution enhances this process by allowing business to quickly access customer data and contact information in order to facilitate quick follow-up with customers.
Implementing an automated order-to-cash solution into receivables collection process can ensure that all tasks are completed accurately, and on-time. From streamlining communication to optimizing follow-up activities, an automated solution enables business to maximize their receivables collections in timely and efficient manner. Doing so equips finance departments with the accurate insight they require in order to make well-informed decisions.
