Optimizing Days Sales Outstanding (Dso) Metric With An Order To Cash Software
How To Improve Dso
The introduction of Human Resources (HR) system into their order to cash process for improved customer experience is the first step. The HR system should have the capability to maintain customer accounts, including complete order and payment records. By providing customers with an up to date and streamlined system, they will be more likely to make payments on time and help reduce the organizations DSO.
Step Two: Automation of Payments The second step is to leverage automation tools to create automated payments from customers. Automation simplifies the payment process, reduces delays, and helps streamline collections. Automated payments also reduce the costs associated with manual payments, allowing organizations to increase their bottom line.
Step Three: Offering Payment Options with DiscountsThe third step is to increase the number of payment options available to customers. Providing customers with multiple payment options will increase the chances of them taking advantage of them. Additionally, offering discounts if they pay their bills early can be an added incentive to their customers to pay on time and reduce the organizations DSO.
Step Four: Streamlining Revenue RecognitionThe fourth step is to streamline revenue recognition. Streamlining the revenue recognition process will ensure that organizations are accurately recognizing revenue and that payments are processed quickly. Additionally, it will help eliminate any disputes with customers, providing more accurate records and reducing the DSO metric of the organization.
Step Five: Leveraging Advanced AnalyticsThe fifth step is to leverage advanced analytics for the DSO metric. Analyzing the order to cash process with comprehensive analytics tool such as LexisNexis businessolutions (LNBS) solution is essential. It provides companies with the opportunity to uncover local and global trends, as well as look at the overall health of their order-to-cash cycle. Companies are able to see how changes in processes are impacting their DSO, ensuring that their order to cash system is optimized.
Conclusion By leveraging the five steps outlined above, organizations can make their order-to-cash process more efficient, reduce the DSO metric, and unlock the growth potential of their business. An order-to-cash system provides the necessary capabilities that allow companies to manage their DSO metric, including the use of automation, streamlined revenue recognition, and advanced analytics. By implementing an OTC system, organizations can take control of their order-to-cash cycle, improve cash flow, and ultimately, drive growth.
