Optimizing Accounts Receivable And Reducing Uncollected Cash With Order To Cash Solutions
Digital Accounts Receivable
Accounts receivable (AR) is critical component of any successful business, particularly those operating on B2B basis. Without proper management of receivables, an organization can quickly find itself in position of having to cover short-term expenses while struggling to receive the cash due to it. This not only has detrimental impact on the cash flow of an organization, but also puts strain on its relationships with external stakeholders, resulting in forfeited opportunities to develop existing partnerships and/or to enter new categories. An effective order to cash (O2C) solution is the key to managing AR processes and preventing uncollectable cash from falling through the cracks.
Though many organizations have various departments responsible for various aspects involved in receivables and collections, the process of efficiently managing AR is no less complex. Issues related to payment terms, approaching payment due dates, and collections can often become daunting for those responsible to manage. Additionally, the inability to have centralized overview of an organizations collections, disbursing of payments, credit limit reconciliation, and the reconciliation of ledger accounts can lead to delays in amassing adequate cash reserves and reaching desired performance targets.
Since business need to quickly process payments and collections, its important to choose an effective proven order-to-cash (O2C) solution. An O2C solution should offer real-time visibility of every flow point throughout the process, establishing automated standardization of invoices and related documents, tracking of payments and deductions, and most importantly, giving transparency to processes that give decision makers at all levels the clarity they need to proactively arrest potential issues. This provides them the opportunity forecast future trends and avoid the risk of waiting for customers to make payments and have no visibility of when the payment is going to be made.
Complex O2C solutions have automated the entire process which extends from sales order entry to invoicing and collections. Automation helps in setting up multiple payment options and error-free discounting which are driven by the data captured in the documents and the invoices to ensure that the entire process remains error-free. This, in turn, facilitates the organization to stay up-to-date with their customers and removes the need for manual data entry at any stage of the process.
To get started with comprehensive O2C solution, an organization must first be able to access centralized platform with comprehensive view of the AR process and initiate the flow of data between all stages. This should be accompanied by an automated process which streamlines and converts data into insights, making it easier to track the status of orders, invoices, payments and invoice history. Furthermore, advanced analytics capabilities such as credit checks, discount eligibility, surprise fees, and the tracking of customer orders can be integrated within the platform to give quick and accurate insights into the organizations accounts receivable. This helps the business to quickly address and identify any risks involved with their customers.
O2C solutions also help in simplifying the tasks of reconciliation and follow-ups, providing the organization powerful tool to identify, track and track payment history. Furthermore, automated dispute management helps business to detect inaccuracies early in the process and rectify them, thereby allowing the team to focus on collecting payments, free from manual data entry.
The most advanced O2C solutions provide end-to-end automation and allow business to quickly identify and assess problems. As such, O2C solutions are an effective way for organizations to manage AR and ensure steady flow of cash. An O2C solution can helpthe organization to remain competitive and efficient, and help maintain and strengthen valuable relationships with stakeholders. Leveraging an effective O2C solution can yield significant advantages by significantly reducing both the time, cost and effort associated with managing accounts receivables.
