Optimizing Cash APplication Through Cloud-Based Order To Cash Software
Cash Application Cloud Based System
Organizations of all kinds must ensure timely and accurate end-to-end Order to Cash (O2C) process. Unfortunately, without cloud-based cash application software, this could be long and challenging endeavor. This risk-laden omission can prevent accurate financial reporting and payment tracking, reduce cash flow, and increase inefficiencies within the accounting department or any other business team involved in the cycle. In this article, we explore the risk of not taking advantage of modern cloud-based systems when crafting an improved O2C process.
The Cost of Cash Inaccuracies
Without the structure and visibility of cloud-based software, organizations can no longer see available invoices, discounts, and returns that may be paid or received. Furthermore, they may not be able to determine how and when those funds should be applied. As result, cash disbursements and receipts are likely to be delays or spread out inequitably resulting in serious impacts to their bottom line. Without real-time cash information, corporations are unable to plan for the future and put their resources to more efficient use.
Revenue Leakage
Furthermore, lack of cash application optimization can lead to instances of manual errors such as miscoded payments or duplicate payments. Relying on complex spreadsheets or manual processes to register payment can also result in prolonged O2C cycle?negatively influencing customersatisfaction levels. If customer-led payment or order is not recorded correctly, then there could be delays or disputes between the customer and the organization. Revenue leakage can also be caused by lack of updatable reports and unpaid invoices that remain dormant.
Force Majeure Risk
Natural disasters, power outages, and other unexpected events create what is known as Force Majeure risk?an event that could temporarily nullify contract or result in delay of contract obligation. Failing to implement cloud-based software increases companies likelihood of not fulfilling its payment obligations because the software is not able to quickly adapt to the changing environment.
Conclusion
Inaccurate Order to Cash processes can pose significant risk to any organization across multitude of industries. Implementing cloud-based cash application software empowers decision makers with powerful tools and real-time data to help streamline their process and improve their responsiveness. Those companies that refuse to adopt such technology will soon find their competitors outstripping them in the face of rapidly changing environment.
