Risk Of Inaction: Reevaluating Financial System Software For Accounts Receivable Management


The accounts receivable experience can be severely hampered within an organization if financial system software is not employed in order to facilitate credit utilization. Without the use of software for credit utilization, the accounts receivable workflow becomes exceptionally inefficient and often anomalous, resulting in an array of risks for the organization. These risks include an increased likelihood of manual errors, diminished cash flow visibility, higher operational costs, compliance, and security issues.

A dearth of technology in the order-to-cash process can lead to increased liabilities, significant bottleneck in cash flow, and reduction in customer satisfaction. Manual errors are generally more likely without financial system software in place to proactively oppose them. Any inaccuracies not identified or corrected in timely fashion can lead to precipitous drop in customer satisfaction, as well as lead to longer settlement process because of payment discrepancies. Furthermore, without software solution to aggregate and analyze data on activity, historic information regarding customer credit is lost and business process auditability is de minimis.

Software solutions also serve to reduce manual paper-laden processes, increasing workflow efficiency and freeing personnel resources, which in turn can reduce the organizations operational costs. Additionally, software implementation has the potential to improve customer outcome by identifying errors and recognizing delinquent customers. Without the use of an efficient software solution, accounts receivable process outcomes are unreliable and prone to errors, diminishing the organizations ability to fulfill its duties and adhere to rules, regulations, and internal standards. In the absence of software, the organization is not likely to leverage cash-flow analysis, which is necessary to ensure financial compliance.

The introduction of software into the accounts receivable system reduces operational risk by bolstering the organizations security parameters. As financial system software can monitor relevant and cyber risks, the organization experiences far less security risk due to imposed data encryption, user access rights and firewalls. As data is kept secure and all communication is heavily encrypted, the chances of any security lapses are mitigated.

Clearly, the risk of not properly leveraging software for credit utilization in an accounts receivable system is wide-ranging, and the C-suite should closely examine the issue and weigh the benefits of availing of software solutions. For organizations engaged in delivering goods and services, the time is nigh for reevaluation of existing financial systems. Whilst the advantages of using software to ensure effective accounts receivables operations, is manifest, the risk of inaction can prove to be perilous liability.

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