Risks Of Ignoring Automation In The Order-To-Cash Cycle


The order-to-cash (O2C) cycle is integral to any businesses operations, yet many companies still neglect to invest in software to facilitate these processes. Being finance executive, you must consider whether forgoing the implementation of dedicated O2C automation software carries greater risk than its cost of implementation.

The information that passes through the O2C cycle, including customer orders and billing, are fundamental to an organizations operations and profitability. This cycle must be managed efficiently to ensure smooth flow of operations, cash flow, and customer satisfaction. As manual processes are generally less accurate and more time-consuming, the use of software can eliminate errors, save expenses and reduce working hours.

Software is vital to strengthen the accounts receivable processes, as manual accounts receivable is especially prone to inaccuracies and inefficiencies. In organizational departments where employee turnover is frequent or workloads are high, manual processing of accounts can become overwhelming and slip-ups are more likely to happen. An automated system will help to improve data accuracy, greatly reduce human error, and prevent lost sales or revenue due to discrepancies.

Other benefits of the software include better coordination across sales and accounts receivable departments, enhanced visibility of customer accounts, thereby reducing customer disputes, improved payment tracking and reporting, improved cash flow forecasting, and decrease in time to invoice and collect payments.

Despite the numerous advantages of software solution for Accounts Receivable, it can also bring its own set of risks. major financial risk is incorrect use of system processes, which can lead to erroneous documentation and/or improper authorization of payments, both of which may result in loss of revenue. In addition, if the system is not properly implemented, controlled and monitored, the costs associated with it can outstrip the benefits in the long term.

With the current proliferation of Software-as-a-Service (SaaS) solutions, the cost and complexity of software implementation has significantly decreased. There should be few excuses for not investing in software solution for the O2C cycle; an automated solution will offer compelling returns in terms of efficiency, accuracy and cost management. The risks of leaving the O2C cycle as is simply do not justify the potential losses.