Order To Cash Solutions And Accounts Receivable Metrics: An Executive’s Guide
ACCOUNTS RECEIVABLE METRICS
In the ever-emergent business landscape, enterprises must find ways to maximize their efficiency in order to stay competitive. One area in particular to which they must pay attention is accounts receivable metrics: the speeds, accuracy, and reliability of these metrics are increasingly fundamental to success. An Order to Cash (OTC) software solution is viable means of automatically achieving such metrics in the most straightforward timeframes.
This article provides comprehensive overview of OTC solutions? potential for success in regards to accounts receivable metrics. With step-by-step instructions and broad survey of the merits contemporary and traditional that such software offer, it is primer for executives seeking comprehensive, efficient solution to their accounts receivable-related challenges.
What is an Order to Cash Solution?
Before delving into the specifics of accounts receivable metrics enabled by Order to Cash solutions, it is important to first understand the broader concept.
At its core, Order to Cash enables an enterprise?s business-to-business transactions. From the ordering and issuing of invoices to the remittance of the totaled invoices, OTC software optimizes the entire process, tracking credit in real-time while also connecting with other systems and providing high levels of automation.
These systems enable the immediate tracking of credit isettings and enable customers to more quickly pay their dues, leading to greater cash flow.
What Does Order to Cash Include?
Order to Cash solutions target the orders-to-cash processes of company, and they provide many specific features that significantly reduce manual work and data entry, as well as automate accounts receivable-related processes. They include functions such as:
Invoicing: OTC software can automatically generate invoices and send them to the customers for payment.
Tax compliance: Companies can use the software to ensure compliance with local, state, and federal taxes, as well as any other applicable regulations.
Financial visibility and analytics: OTC solutions provide real-time insights into cash flow, financial measures like DSO (Days Sales Outstanding) or DPO (Days Payable Outstanding), as well as capturing customer data.
Order-handling: OTC software helps with functions such as order entry, collections, disputes, refunds, credits, and rebills.
Credit risk assessment: In addition, they can assess the credit worthiness of customers in order to immediately determine credit limits and other settings.
How Do These Solutions Help Accounts Receivable Metrics?
As result of its capabilities, an Order to Cash solution enables several key accounts receivable metrics that can have significant impact on the success of company.
The first metric is speed: the automated generation of invoices and automatic receivables tracking can significantly reduce the period between order entry and payment receipt. This can benefit the relationship between the company and its customers, as they are more likely to turn to them later on because they get paid rapidly.
The second metric is accuracy: automated data collection and entry removes manual errors as well as manual verification of data accuracy. This improves accuracy, resulting in more effective workflow and more payments received on time.
The third metric is reliability: with OTC helps automate the billing and payment processes, it can enable the capturing of all applicable receivables, thereby maximizing cash flow and the companies financial success.
Another key benefit is the ability of such solutions to link to other systems, providing true end-to-end automation.
Conclusion
Order to Cash solutions offer comprehensive automation of processes key to accounts receivable metrics, which then facilitate the faster, more accurate, and more efficient capture of receivables. Executives should therefore consider these solutions when looking for comprehensive, reliable option to ensure their companies success.
