Receiving Optimal Kpis In Order To Cash Process
ACCOUNTS RECEIVABLE KPIS
Organizations seeking to implement solution to their accounts receivable needs could utilize an Order to Cash (OTC) system. An OTC system helps optimize key performance indicators (KPIs) in the accounts receivable process, making it easier for executives to review performance feedback quickly and accurately.
For organizations interested in an OTC solution, it is only natural to be curious about how these systems work and the KPIs they bring. This guide will walk executives through the process of implementing an OTC system and how it can help maximize KPIs in their corporation’s accounts receivable processes.
Overview of an Order to Cash System
An Order to Cash system incorporates automated processes and technologies to improve accounts receivable performance, allowing executives to make more informed decisions. OTC systems track customer activity and automate key steps in the accounts receivable process. The software integrates with back-office systems and consolidates financial data into single, consolidated view of accounts receivable performance.
An OTC system enables companies to streamline their accounts receivable process, freeing up IT resources, in turn allowing executives to focus on decision-making with real-time data.
OTC KPIs
When evaluating an OTC system, organizations should consider the key performance indicators it brings to the accounts receivable process. Primarily, companies should look for KPIs such as customer collections cycle time, overdue invoices, and cash flow.
Customer Collections Cycle Time: Customer collections cycle time is the amount of time it takes for customer to pay for an invoice. An OTC system can improve the process by automating and streamlining billing, follow-up, and payment receipt, ensuring invoices are fully paid in timely manner.
Overdue Invoices: To ensure the accounts receivable process is efficient and accurate, executives should monitor the number of overdue invoices. An OTC system can help track and manage overdue invoices, helping to identify bottlenecks or areas where the process may need to be improved.
Cash Flow: Cash flow is arguably the most important KPI for executives to consider. An OTC system can help improve cash flow by automating manual and paper-based processes, resulting in faster turnaround times and fewer delays.
Deployment and Maintenance
To successfully deploy and maintain an OTC system, executives must ensure their IT teams are up-to-date on industry best practices. Information technology personnel should oversee the process of integration, as well as understand how different technologies interact with the OTC system. Executives should also consult their IT personnel when selecting and installing the software, as well as throughout the maintenance process.
Benefits of an OTC System
Executives considering implementing an OTC system should be aware of the potential benefits and advantages it can bring to their organization. An OTC system can streamline the accounts receivable process and improve operational efficiency, reducing errors and delays in the billing and payment cycle. The system also makes it easier to access and monitor key performance indicators, so executives can quickly identify areas that need improvement.
Finally, an OTC system can help an organization reduce costs associated with manual and paper-based processes, freeing up IT resources to be used elsewhere in the organization. By leveraging an OTC system, executives can ensure their accounts receivable process is efficient and accurate, leading to better performance overall.
Conclusion
For executives looking to optimize the accounts receivable process, an Order to Cash system is viable solution. An OTC system can help maximize KPIs such as customer collections cycle time, overdue invoices, and cash flow. Executives must ensure their IT personnel are equipped with the necessary knowledge to successfully deploy and maintain the system, and should be aware of the potential benefits an OTC system can bring to their organization.
