The Financial Risk Of Neglecting Order To Cash Automation


For the modern business, manual order to cash (O2C) processes represent few challenges to profitability and growth. While there are advantages in an organizations preference to continue with manual processes, certain risks associated with such practices can put company at disadvantage in the long run. For finance executives considering the long-term ramifications of manual O2C management, there are very real risks that must be addressed.

To begin with, the lack of automation makes the entire order-to-cash process extremely wasteful in terms of the workforce and resources allocated. Manual data entry and reconciliations alone take up disproportionate amounts of time and labor to process single transaction. This slow process can become expensive especially in the face of profitability demands and puts the company in situation where costs can often exceed revenues. Moreover, manual processing increases the chance of errors in managing O2C transactions, further damaging companies revenue-generating potential.

The risk associated with manual O2C processes is not limited to the bottom line. An inefficient order-to-cash process is likely to lead to chaos when it comes to customer service and communication. Slow payments lead to customer dissatisfaction, damage the brand’s reputation, and delay the ability to get repeat or recurring customers. Low trust from customers and slower payment times can damage client relationships that have been built up with time and effort.

Beyond revenue and communication, the primary risk to companies order to cash process is the potential lack of visibility into the entire workflow. With lack of software automation, companies are often comfortable with the idea of managing multiple accounts payable and accounts receivable in different locations. Because of this lack of automation, it becomes difficult to identify trends, efficiently manage cash flow, and process orders quickly. This lack of insight prevents business from being able to flexibly and effectively plan operations so that it can maximize available resources in order to get payment cycles faster with higher accuracy and much lower costs.

The risks associated with manual order to cash processes are too great to be ignored. Organizations that utilize software automation in order to manage O2C processes gain competitive edge in business through insightful analytics and improved customer relations. Although the cost associated with O2C software automation can be high at first, the return over time makes it worth the investment. Automated O2C software can make business more robust, transparent, and profitable. As such, finance executives should investigate the options available in order to mitigate the risks associated with manual O2C management practices.