Optimizing Order To Cash Workflows Without Software: The Risk Of Ignorance
AR KPIS
In todays ever-evolving, tech-driven business environment, firms have access to (and, indeed, are expected to use) digital solutions to maximize the efficiency of their processes. This provides tangible benefits such as cost savings, improved speed and accuracy, scalability, and enhanced customer experience. Yet, despite these advantages, there remains vestigial reluctance to fully embrace digital tools.
Specifically, there are numerous pressing reasons to use software in order to cash (OTC) processes, yet some companies continue to rely on manual programs, opting to use paper-based procedures. This results in an increase in operational risks, as critical activities such as billing and invoicing, payment receipt and reconciliation, and cash-flow management are implemented outside software environment.
The costs of such indifference are immense and can be seen in various areas. To begin with, manual processes often leave company exposed to errors. By their nature, OTC operations are complicated and typically involve high volume of transactions. The margin for human error is therefore too wide to sustain over the long term. Additionally, manual OTC processes lead to delays in billing, insufficient invoice accuracy, and poor visibility of cash flows, thus shattering customer experience and eroding brand reputation.
Furthermore, manual processes are slow to scale and are overwhelmed by the complexity of increasing business operations, leading to resource bottlenecks. This forces firm to devote more time and money into manual tasks, thereby compromising performance across other areas.
Accounting functions are also adversely impacted by manual OTC procedures. Due to the increased time devoted to minor batch entry activities, there is little bandwidth to undertake highly skilled activities such as variance analysis, journal entry preparation and review, reconciliations, or trend analysis. This can effectively undermine the entire purpose of automation.
The challenges posed by manual OTC also apply to compliance. Any sort of audit or compliance test becomes overwhelming when performed manually. This can lead to myriad risks, not least of which are financial penalties for non-compliance to regulations.
It is therefore no surprise that automated OTC software are the norm today. Such systems are designed to reduce errors and provide instantaneous access to data, aiding in decision-making and conquering various operational challenges associated with manual processes.
By automating OTC workflows and utilizing the accompanying tracking, reporting and analytics capabilities, firms can make well-informed decisions, better manage their cash flow, and attain operational scalability thus freeing up personnel for more productive activities.
The risk of ignoring software in OTC processes should be taken seriously. The repercussions of manual processes are too great to be ignored, and simply opting out of the automation revolution is not viable solution. The time is ripe to overcome the reluctance to digital transformation and embrace the available technological advancements.
