Optimizing The Order To Cash Process Through Automation
AR AUTOMATION FOR FACTORS
Nowadays, managers in finance departments everywhere are presented with the dilemma of optimizing order to cash processes while also avoiding exorbitant costs associated with manual implementation. Utilizing automated solutions that can be integrated into order to cash infrastructures leads to immense time savings and improved efficiency. Executives that are seeking an order to cash solution need to be aware of the potential opportunity to leverage automation to truly maximize the potential productivity of the business.
In this article, we shall explore the potential benefits of automating order to cash solutions with focus on improving the time-to-cash (TTC) cycle. We shall walk through the process of implementing an automated order to cash solution within companies infrastructure, which includes automation of receivables processing and accounts receivable (AR) automation. By the end of this article, the executive reader should not only understand the importance of automation in increasing overall efficiency, but also have concrete step-by-step guide for setting up automated order to cash solutions.
Why Automate the Order to Cash Process?
It is no secret that improving the efficiency of order to cash processes is essential in businesses of any size. However, automation is the key to unlocking higher level of scalability and speed when it comes to capitalizing on companies resources. By automating particular tasks and measuring progress with key performance indicators (KPIs), such as time-to-cash and revenue cycles, businesses can gain an edge over competitors by freeing up resources to focus on more strategic projects.
Manual data entry and onerous manual tracking of payments creates an opportunity for errors to be made, as more and more data is transferred and misinterpreted. Automation not only reduces the risk of erroneous inputs leading to lost payments, but it also speeds up the entire process. In addition, automating the back office operations, such as data processing, allows finance departments to concentrate their attention on more dynamic tasks, such as accounts receivable management and customer service.
Step-by-Step Guide to Automating Order to Cash Process
Step 1: Data Collection and Entry: Before anything else, the finance team must collect and enter data into the system in timely, accurate manner. This process is often the most labor-intensive component of the order to cash process, but it is also the most critical. Ensuring that the data is correctly updated and managed will ensure that the rest of the order to cash process is streamlined, efficient, and error-free.
Step 2: Invoice Entry and Validation: After data has been collected, the next step is to create and send invoices to customers for goods or services rendered. The team should be sure to validate each invoice to ensure accuracy and avoid any discrepancies in the deliverables. Automation of the invoice entry and validation process enables the team to handle higher volumes and extends the reach of the finance team in terms of international invoices.
Step 3: Payment Collection and Reconciliation: Automation also helps to streamline the payment collection process, allowing the finance team to get paid faster as customers? payment is processed and reconciled in timelier manner. Automated reconciliation also allows payments to be matched up with the respective invoices more quickly, which saves the finance team time and resources. This process is also essential to ensure there are no discrepancies between the invoices and the payments received.
Step 4: AR Automation: Accounts receivable automation (AR Automation) is the last step in automating the entire order to cash process. This is the process of automating the collection of Open Account receivables with the help of software. By automating the collection process, finance departments can reduce the cost of collection and save time in collecting delinquent accounts. AR automation can also be used to track payments and invoices in real-time and help finance departments better forecast their cash flow.
Conclusion
Order to cash automation provides businesses with tools and resources to reduce the time and effort spent on manual processes and allows for more efficient capital management. This guide was intended to provide executives with step-by-step overview of how an order to cash automation solution should be implemented for maximum efficiency. By leveraging automation, finance departments can enjoy higher level of accuracy and speed across their day-to-day operations and benefit from increased scalability and improved resource allocation.
