Optimising Accounts Receivable Processing With An Order To Cash Solution
Automates Accounts Receivable Processing
Accounts Receivable (AR) processing is an arduous task for most finance departments, but the rewards can be substantial when the associated processes are streamlined and automated. Implementing an Order To Cash (OTC) solution can reduce error rates and improve operational efficiency, allowing for properly managed receivables. With the right approach, executives can make informed decisions about their investments in AR automation technology, and in turn, maximise the returns for their organisation.
Introduction
The process of Accounts Receivable in which customers are billed for goods or services and payments are received is essential to generating revenue. However, discrepancies between invoices, supplier payments and customer payments can lead to the accumulation of delayed invoices and uncollected payments, resulting in cash flow drops. Financial executives have long sought ways to better manage the Accounts Receivable process, and an Order To Cash solution offers viable solution.
An Order To Cash solution, sometimes known as Revenue Cycle Management, is suite of systems and processes designed to automate the task of invoicing and payments collection. Though it is not necessarily new technology, the benefits of OTC have become increasingly evident in recent years, along with the need for organisations to become more efficient in different facets of their operations. Utilising the latest in AR automation technology, executives can reduce delays and discrepancies by processing invoices, supplier payments and customer payments in an automated manner.
Step-by-Step Guide
1. Determine the organisation?s goals: Before investing in an OTC solution, it is important to fully understand the organisation?s aims in terms of Accounts Receivable management. Does the organisation require full-scale system, or is lesser solution needed? Questions such as these should be considered to establish the scope of the investment.
2. Evaluate OTC solutions: Once the scope of the implementation has been determined, executives can start evaluating the available solutions. This can include researching vendors and assessing reference customers to gauge the success of the vendor’s other implementations. Executives should also look out for certain criteria, such as the scalability of the solution and its ability to integrate with other systems.
3. Assess system requirements: When evaluating prospective solution, it is important to take an inventory of the system requirements that must be adhered to. For instance, the organisation may require an AR automation system that is compliant with specific rules and regulations, such as GDPR in Europe. Other requirements may include centralised data storage capabilities and detailed reporting.
4. Ascertain the implementation timeline: Once the solution has been selected, the implementation timeline should be established. Considerations may include the need to migrate data from existing systems and, of course, provisioning the actual software itself. Building in time for staff training is also essential to ensure successful transition to the new processes.
5. Determine the level of automation: Executives should aim to achieve maximum automation within the Order To Cash process; this might include automating accounts receivable functions like billing and accounts payables, as well as using email to communicate with customers. It is vital that manual processes are minimised in order to achieve the desired returns on investment.
6. Monitor the performance of the system: Post-implementation, it is necessary to continually track the performance of the automated system in comparison to the desired objectives. Regular reviews should be undertaken and modifications made where needed. This process should be ongoing, with the aim of continually improving efficiency and accuracy in the organisation’s AR management.
Conclusion
By investing in an automated Order To Cash system, C-suite executives can maximise the accuracy and efficiency of their overall Accounts Receivable management processes, while also reducing delays and discrepancies. With well-conceived strategy, experts can ensure that their investments are as productive as possible, and reap the rewards of an automated AR system.
