Optimizing Operational Performance With O2C Software
DAY SALES OUTSTANDING FORMULA
As financial executive, it is important to maximize operational performance in order to reduce operational costs, cut waste, and improve overall financial position. key focus of any operational improvement should center around the order to cash (O2C) process and how software can be used to streamline the process, particularly when calculating day sales outstanding (DSO).
DSO is metric used to measure the average number of days taken for customers to pay their invoices and is widely used by financial executives to determine current and future cash-flows. To ensure accuracy and precision when calculating DSO, Finance executives should look to purchase software that has been specifically designed to automate the O2C process.
An O2C software solution centers around configurable workflows, automated invoicing, and document tracking, all enabling better managed order system from initial order to successful transaction. Utilizing sophisticated O2C system allows the financial team to proactively manage their customers? payment cycles, detect discrepancies, and monitor the success of their financial operations.
Furthermore, with modern O2C no manual data entry is required as the software allows for fast and accurate processing of customer orders, invoices, and billing. The result is less time wasted and more time for productive, strategic work that adds value to the company.
One of the most important features of any O2C software is the flexibility it gives finance executives to configure the software to their unique business operations, the data points they need to monitor, and the parameters they need to consider in their calculations. This is particularly valuable when it comes to calculating DSO, as finance departments may want to accurately measure only the receivables that fall within specific terms and conditions.
The ability to customize the O2C software solution with appropriate data points and metrics not only provides financial executives with an accurate overview of the current state of their order to cash process, but it also provides them with the necessary information to make informed forecasts that address future cash flow issues, such as when and how they will receive payment from customers.
In conclusion, it is clear that the utilization of an O2C software solution is becoming increasingly critical for financial executives looking to increase the accuracy and precision of their order to cash processes and day sales outstanding calculations. By purchasing software package designed specifically for their order to cash needs, executives can speed up cash flow and have access to valuable metrics and data points which will help them to make decisions that will improve operational performance.
