Risk Of Not Implementing Deductions Management Solution
DEDUCTIONS MANAGEMENT SOLUTION
Organizations in the Order-to-Cash (OtC) space operate in complex environment of multi-party transactional relationships, many of which involve deductions being taken from the accounts receivables. The failure to implement an effective deductions management solution can have an adverse impact on an organizations financial and operational performance.
businesses that do not effectively manage their deductions can experience range of operational risks that can lead to severe financial losses. Some areas of risk can include make-up process that is slow and tedious; inaccurate reconciliation of assigned deductions; slow response to customers? deductions milestones; the inability to identify changes in deductive activities on time; and significant delays in accurately adjusting the receivables balance.
The lack of automation can also lead to inadequate forecasts of cash coming in or extended time before disputes can be resolved. In addition, if manual processes are relied upon, validation of deduction accuracy and amount can often be difficult. This inability to verify and validate can lead to growing backlog with incorrect deductive disputes. It can also significantly limit the ability to keep track of deductions from various customers and the status of deductions deductions in the whole OtC process.
A modern software-based deductions management solution can help alleviate many of the risks that can arise from not properly managing deductions. Automated processes serve to streamline and expedite the resolution of any deductions disputes. And, in areas of disputes and deductions, real-time window into the status of deductions is available, that greatly enhances the ability of Finance executive to stay in control of all the required OtC activities.
Such software solutions can also alleviate the risk of data inaccuracy in the reconciliations process. Leveraging AI and Robotic Process Automation (RPA) technologies, deductions can be managed with accuracy, while also obtaining greater visibility of data related to the OtC process.
The implementation of software based deductions management solution can also result in significant cost savings, by reducing the total cost of dispute resolution and reducing the time by as much as 80%. Automated systems can take over manual processes such as validating deductions and analytical techniques that can result in better decision making.
In conclusion, the risk of not implementing dedicated deductions management solution can come with hefty price tag, both in financial and operational terms. An effective software-based solutions can reduce risk and ensure cash flow predictability while at the same time expedite and accurate dispute resolution, reduce operating costs and provide valuable and real-time insights into the deductions process.
