Risk Of Not Automating Collections Process
AUTOMATE COLLECTIONS PROCESS
Adopting an order-to-cash software is vital step to unlocking an efficient collections process. But what is the cost of avoiding automation? Companies that are reticent or procrastinate on automating their workflow risk facing major financial, operational and reputational risks.
A financial risk identified by many finance executives is the potential for bad debt. Without order-to-cash automation the company is missing out on optimized payment cycles, providing customers with the ability to pay early. With significant discounts linked to early payments, this can make big difference to the cash flow health of any business. The lack of automation means manual data entry, which can increase invoice inaccuracy, leading to customer disputes and delayed payments. This leads to increased costs chasing overdue invoices as well as missing payment windows.
Operational risks occur with lack of process control. Companies can end up chasing the same invoices multiple times due to lack of coordination and visibility, creating huge inefficiencies in their customer service teams. This in turn creates customer dissatisfaction and can lead to catastrophic damage to their own reputation. Investing in order to cash software can also save money on third-party collections, and using it can ensure any payment issues are logged and tracked, making it much easier to target overdue payments and head off potential risks for the company.
Older systems can still be encountered in some companies, who may fail to optimize their outdated payment cycles and lack project visibility, resulting in lost customer data and higher customer onboarding costs. Legacy methods of customer onboarding, customer management and collections can also create huge disjointedness within the processes and data held, with each team using different software. This can lead to customer satisfaction issues, customer miss-information and longer customer onboarding time and costs.
Overall, leveraging order-to-cash software can result in an improved and timely billing process, reducing manual entry efforts and drastically improving the customer experience. Automation provides full visibility over operations to help identify potential risks and cash discrepancies and significantly helps to minimize the financial risks associated with collections. In executing so, automation also helps organizations drive operational excellence, reduce operational costs and increase customer loyalty. Every finance executive should be considering the use of order-to-cash software to reduce risks and unlock the full power of automated collections process.
