Order To Cash Arrangement: Understanding The Benefits For The C-Suite


As member of the executive leadership, understanding the significance of well-crafted order-to-cash arrangement is essential when making decisions to improve the overall financial wellbeing of your organization. An effective order-to-cash system gives the C-suite deep insight into the profits existing in the current working process, and provides the means to configure it to better manage the incoming invoices and payments. Knowing the fundamental features of your order-to-cash model can give you an equilibrium of resources, ensure profitability and protect your organization from costly mistakes.

Calculating the AR is an integral part of this process. Using comprehensive order-to-cash solution is the best way to quickly assess the current state of your receivables, calculate the AR, and gain insight into potential income streams. To properly leverage this tool, it is important to understand how the system works, and how to use it to its full potential.

Step-by-Step Guide to Calculating AR

Step 1: Input customer details into the system.

Input any relevant customer information, including their name, contact details, past payment history and credit risk rating, into the order-to-cash solution’s customer database.

Step 2: Insert invoices.

Upload or type in the invoices generated for each customer. This data should include the total sum owed, the payment terms, and the payment due date.

Step 3: Monitor invoices for payment.

Analyze the customer database for any overdue payments and review all payment terms. Mark any invoice items that have been paid and deduct them from the customer?s total sum owed.

Step 4: Generate the Accounts Receivable Report.

The order-to-cash solution should be able to generate report of all customer invoices and the status of their payments. The report should include the customer?s current AR balance and the amount of overdue invoices.

Step 5: Analyze the Accounts Receivable Report.

Carefully scrutinize the Accounts Receivable report to assess your organizations potential income streams. Use the report to double check all payments, note any overdue invoices, and take the necessary steps to reduce the Accounts Receivable (AR).

By following these steps and leveraging the order-to-cash solution, the C-suite can ensure the accuracy of their AR calculations and make informed decisions based upon the best available data. streamlined and automated solution for calculating AR provides the insight needed to improve the financial condition of the business, and allows executives to maximize the organizations work efficiency and credit policies.