The Cost Of Not Adopting Order To Cash Software


Organizations across the globe are striving to optimize their order to cash processes to expedite and reduce the total time to revenue. With the demand for faster turnaround time, there is increasing pressure on corporate cash reserves, prompting finance executives to embrace the adoption of order to cash software. But what are the financial and operational risks associated with not adopting these technologies?

In todays business climate, manual processing of customer invoices, payments and associated records puts organizations at an acute disadvantage. Manual collection processes in accounts receivable (A/R) often involve redundant and time consuming processes, incurring delays and resulting in reduced working capital. This can have direct impact to the bottom line as companies have to set aside higher portion of their capital for A/R collections and remittances to their suppliers.

Another risk associated with manual collection processes is the potential for misunderstandings and incorrect processing due to human error. When document reconciliation, payment tracking and performance measurement has to be done manually, the potential for data entries to be wrong or incomplete is higher. Decisions taken based on such data can lead to incorrect assumptions about customer performance or collection trends, resulting in extensive financial losses.

A further risk comes from the administrative costs incurred from lack of visibility into the A/R process. As more invoices need to be sent manually, collected and filed, organizations find that they need to employ additional personnel either in their accounts receivable departments or with third-parties, to achieve the manual processing. This can have direct negative impact to the organizations overhead costs. Further, the time it takes to process invoices varies depending on the collections staff, resulting in longer credit cycles, leading to even higher operational costs.

The most significant risk associated with not adopting A/R collection software however, is the lack of automation. Manual entry of customer data and incomplete customer accounts often result in collection delays that can be substantial. As data is keyed-in repeatedly and manually, the rate of data entry is slower. Not only does this double the amount of time invoices are collected, but it also increases the chances of errors leading to customer dissatisfaction.

By adopting order to cash software, finance executives can mitigate the above risks. Software solutions are able to automatically monitor the A/R performance and payments, providing real-time visibility into the process. This visibility reduces delays in processing invoices and collections, and shortens the credit cycle significantly. The automated features available in such software solutions can also provide accuracy and control financial processes, ensuring that collections are managed efficiently.

An investment in order to cash software is an investment in the growth of the organization. By reducing manual data entry and time wastage, such an investment helps the organization increase its bottom line, while also improving customer and supplier satisfaction. The decision to adopt order to cash software is ultimately the difference between leveraging healthy working capital and adopting an inefficient, costly manual process.