Risks Of Forgoing Order To Cash Software
B2B COLLECTIONS SOFTWARE
The idea of forgoing software for b2b collections can be tempting for organizations. It presents the dichotomy between the purported benefits of forgoing software, primarily in costs, and the risks that software tools can mitigate. This article will address the potential risks associated with foregoing order to cash software and elaborate on why software presents valuable tool for finance executives in mitigating those risks.
Eliminating software can result in significant workforce requirement. To successfully collect open invoices and keep track of customer account statuses, an organization would need to maintain large, highly dedicated staff to manage these tasks. However, software solution can automate many of the tasks associated with b2b collections, freeing up the organizations workforce to focus on more value-added activities. In addition to reducing the chance of errors, software provides speed advantage in processing large amounts of customer data. Studies have found that software-enabled automation of b2b collections can increase collections turnover rates by 60-90%.
The risks of forgoing software in b2b collections also include the possibility of increased revenue leakage due to lack of visibility into customer account information. Software provides transparency into the customer’s entire accounts receivable portfolio and their payment status, allowing the organization to identify accounts that may need additional assistance in collecting or accounts that may not have been pursued. It is important to have the ability to identify high-risk accounts quickly so that action can be taken immediately.
Without software, capturing data associated with customer accounts is difficult and time-consuming. Manual entry of each transaction is tedious and prone to errors. Errors can lead to missed payments, lack of trust, and damage to the companies brand. Software tools provide clear, accurate, and real-time view into invoice data, which is necessary to proactively manage collections performance.
Additionally, software provides important operational efficiency gains over manual processes, such as faster invoice reconciliation, improved debtor tracking, and predictable cash flow. Without software, many of these functions must be done manually. In particular, the manual processing of customer payments delays the receipt of payment and can increase the time it takes to close month?s books.
Ultimately, when considering the risks associated with foregoing software for b2b collections, it is important to reflect on opportunities to improve operations and maximize returns. Achieving streamlined and efficient order to cash processes can be facilitated through software tools, providing organizations with the visibility they need to make informed decisions. Software can help finance executives optimize their collections process, improve customer service and reduce overhead associated with manual processes.
