The Peril Of Relying On Manual Processes In Order To Cash
DSO IN ACCOUNTING
In the current digital economy, FinTech companies are rapidly developing innovative software to automate various mundane aspects of bookkeeping and accounting. Automating the order to cash process is one such example of how accounting software is drastically improving the speed and accuracy of financial transactions. By embracing the advent of e-invoicing and other modern forms of software, businesses not only benefit from greater agility and accuracy, but they also reduce the risk of human error.
For many organizations, the Order to Cash (OTC) process continues to operate largely under manual guidance; between invoicing, collection and accounting, most organizations still rely heavily upon manual labor to generate and process the paperwork necessary to successfully complete transaction. While the initial cost and negligence of automation may be appealing, the inherent risk that comes with manual processing should not be discounted.
Using manual process to handle OTC transactions certainly carries significant risk. Whether result of faulty processes, lack of oversight, or lapses in attention, manual processing inevitably leads to greater inaccuracy and less agility than automated systems. Inaccuracies are inevitable, due to the human factor. Human errors can be caused by inefficient processes, individuals overlooking task or invoice, resulting in significant delays, or the misfiling of an essential document resulting in higher operating costs.
Moreover, incorrect accounts receivable allocations weaken the accuracy of financial records and generate inaccurate account balances. Furthermore, without an automated system in place, it is considerably more difficult to detect and investigate fraud; with fewer safeguards in place, businesses are left exposed when attempting to identify discrepancies in payment.
Being that manual processes can be far less efficient and therefore costly, they are likely to have detrimental impact on the day-to-day operations of any organization. Manual processes create larger margins of error and cause costly delays, while also consuming greater portions of resources. Furthermore, financial documents such as purchase orders, invoices and receipts, require time-consuming manual checks and verifications in order to ensure accuracy, which is not only time consuming, but labor intensive.
For organizations looking to stay competitive, leveraging software for OTC transactions is an essential step. Automated software allows for greater accuracy and speed, while also reducing the costs associated with employing manual processes. With automated software, businesses can eliminate much of the waste associated with manual entry and verification.
On top of efficiency, the automated process can also provide valuable insight into operation performance by monitoring and tracking variety of financial KPIs in order to more effectively detect and prevent fraud. By leveraging such technology, businesses can gain higher degree of accuracy, agility and cost savings when it comes to managing financial transactions.
In an age where automation is increasingly becoming the new normal, businesses cannot afford to take step back by relying on outdated manual processes. In order to stay competitive, businesses must embrace the use of automated systems that can bring greater accuracy, speed and efficiency to the OTC process. In the long run, these advancements can help save substantially on costs, while also providing businesses with greater sense of security.
