A Comprehensive Guide On Order To Cash Solutions For ARCollections

Ar Collections

According to Dun Bradstreet, accounts receivable (AR) delinquency??simply the average time it takes for company to collect on F.O.B. terms??can double the cost of processing and managing invoices. This is where order to cash (OTC) Softwaresolutions come in. If C-suite executive in finance department is searching for an OTC solution to achieve successful AR collections, then this guide is for them.

Defining Order to Cash

Order to cash, or OTC, is term used to encompass all of the steps in the process of receiving and fulfilling customer orders and getting paid. It includes all of the processes from product selection and ordering, to shipping and billing, through to payment. OTC solutions are imperative to organizations of all sizes because they streamline fundamental activities, save time and resources as well as reducing the chances of errors in the transaction process.

Why Implement an Order to Cash Solution?

The primary reason organizations implement an OTC solution is to increase the efficiency and reduce mistakes in their collection process. It also boosts customersatisfaction by allowing customers directly access their invoices, view the status of orders, and make payments among other features, allowing the organization to serve its customers better. An OTC system reduces manual data entry and Human Resources (HR) processing, allowing business to take advantage of electronic data interchange and process large volumes of payments at no cost, both of which reduce costs and error rates. Additionally, it enables companies to monitor receivables more accurately, opening up the possibility of more efficient collections and more accurate forecasting of their cash flow.

Key Benefits of an OTC Solution

There are many benefits an organizationstands to gain from an OTC solution. These include:

Real-time invoicing and payment processing: An OTC solution provides an automated platform to streamline invoicing, payment processing, and collection of receivables, resulting in faster return on investments and increased customersatisfaction.

Improved customerservice: With an OTC solution, customers can have direct access to their invoices and order information, and make payments at anytime, from any device.

Improved financial reporting: An OTC solution allows an organization to have accurate and up-to-date financial reports, allowing them to make more informed decisions in managing their cash flow, and prioritize clients.

A more efficient collection process: An OTC solution provides more organized system for collections and payments, reducing paperwork and making collections more efficient.

Reduced costs: Since all of the processes are automated and streamlined, OTC solutions reduce the cost of manual data entry and HR processing, allowing organizations to take advantage of electronic data interchange and process large volumes of payments at an economical cost.

Step-By-Step Guide to Using an OTC Solution for AR Collections

Step 1: Select the right OTC solution for your business

Before implementing an OTC solution, it is important to select the right solution for the organizations needs. Organizations should assess their own requirements and compare the features offered by different OTC solutions to ensure that the selected solution aligns with their business needs.

Step 2: Configure the OTC solution

Once the organization has selected the right OTC solution for their business, the next step is to configure the software to meet their requirements. This includes entering data into the system, such as customer information, payment terms, and invoices; setting up the payment processing system to support secure payments; and integrating the OTC solution with other systems, such as the accounting system, customer relationship management (CRM) system, and enterprise resource planning system.

Step 3: Establish integration with customer accounting systems

Organizations should establish direct integration between their OTC solution and the customers accounting system. This will enable customer invoices and statements to be created automatically, and also enable customer payments to be made behind the scenes with minimal intervention. This reduces the need for manual data entry and increases the accuracy of the process.

Step 4: Introduce automated reminders and payment options

Organizations should take advantage of the automated reminders and payment options available when using an OTC solution, such as customer emails for payment reminders or invoices, secure customer portal for bill payment, and the ability to schedule automated customer reminders. These features help ensure that customers make payments in timely manner, reducing the risk of delinquent accounts.

Step 5: Monitor results and make necessary changes

Once the OTC solution is implemented, organizations should monitor the results and make changes as necessary. This includes evaluating the response rate of customers to the automated reminders, assessing the payment speed of customers, and determining whether the OTC solution has had an impact on their overall collection process.

In conclusion, organizations should certainly consider investing in an OTC solution to improve their AR collections and reduce cost. The above steps provide an effective approach that leaders in the finance department can take to ensure they get the most out of an OTC solution and make efficient AR collections.