The Cost Of Not Using Days Receivables Outstanding Software
DAYS RECEIVABLE OUTSTANDING
In the order-to-cash process, shortening the accounts receivable cycle has enormous financial benefits. As the cash flow value of uncollected invoices accumulates daily, conducting timely audit of accounts receivable is vital to reducing days receivable outstanding (DRO). Failure to conduct such an audit promptly and accurately can be costly over the long run, with numerous risks and opportunities for disruption lying under the surface.
One of the most important tools to expedite DRO cycle accuracy and optimization is software. Finance executives looking for way to streamline and enhance the reliability of their accounts receivable processes should consider implementing DRO software.
Underutilizing DRO software can prompt series of missed opportunities for economic gains, as well as incurring numerous risks. The most common instances of lost savings from not using DRO software can come from lack of automation and data accuracy. By not having an integrated system in place to track, audit and manage accounts receivable and all related transactions, companies are suddenly at the mercy of manual document searches, antiquated data processing and forecasting projections, and actual customer payments.
Without sufficient and up-to-date tracking system in place, companies may find customer payments too slow to prevent overdue receivables, or that customer disputes can easily wreck havoc upon productivity. Furthermore, manual audits rarely have sufficient calculations in place to capture the full financial value of sales, particularly in recouping customer deductions and discrepancies.
Without the correct metrics to measure the affordability of system and its practicality, any prospective company is putting itself in great financial risk by foregoing the purchase of DRO software solution, especially since these systems are all built to scale with commonsense top-to-bottom financial structure. By implementing such system, companies can, among other benefits, save time, reduce costs and promote higher customer satisfaction through better customer service.
On account of customer service, DRO software products can help to guarantee that customer payments are tracked and addressed in due time, leaving customers with fewer payment disagreements or unsolved customer disputes. This customer service can be exemplified further when the software is integrated with invoicing systems and customer feedback loops, allowing customers greater openness and interactivity with their accounts receivable.
Finally, major central benefit of DRO software is its scalability. As customers? order and payment data can be accumulated and analyzed, research indicates that this software helps companies to plan discounts, payment windows and payment reminders more effectively, and accounts receivable operations are generally easier to manage. This scalability helps to remain competitive in the marketplace, as getting customers paid promptly is cornerstone of customer service and business performance.
The cost of not implementing DRO software for an order-to-cash system can be imagined in terms of missed savings and missed customer opportunities. Decreased accuracy, longer customer payments and unreliable customer data statistics can eventually lead to decreased customer loyalty and greater debt due to overdue invoices. Implementing reliable and possibly integrated software system will not just capture the added value of financial advisories, but it can improve the essence of customer relations through the reduction of overdue receivables. In other words, the cost of not considering this software solution to the order-to-cash process is simply too great to ignore.
