The Opportunity Cost Of Neglecting Accounts Receivable Automation


As companies look to expand their reach, grow, and ultimately become more profitable, one of the key challenges also lies in optimizing their Order to Cash process. When managing Order to Cash (OTC) cycle, it is paramount to consider the risks of neglecting to leverage software tools that assure efficiencies in Accounts Receivable (AR).

Not only do manual methods of Accounts Receivable management lead to increased labour costs, but also pose risks with respect to timely payments. Traditional accounting systems require manual labour for the collection of payments and monitoring of invoices in the Accounts Receivable ledger. When this function is not adequately managed, the organization runs the risk of late payments without the promise of an automated system alerting to due payments and the ability to track these processes effectively.

Although companies may think that manually managing their Accounts Receivable process may save them significant financial investment, AR automation is an undeniable solution that can pay itself off very quickly. Software solutions that focus on automating Accounts Receivable processes, such as Order to Cash solutions, help companies data collaboratively, automate processes, send timely notifications, and ultimately free up time and labour cost associated with manual Invoicing and Payment collection.

Secondly, when companies leverage Order to Cash solutions, they can reduce or prevent the risk of lost invoices and discrepancies a double cost savings due to the number of special projects and resources associated with finding missing invoices and tracking discrepancies. Indeed, with an automated solution, companies are less likely to experience such issues with their Accounts Receivable processes due to built-in controls and automated notifications.

Finally, the data collected through an Accounts Receivable automation solution is invaluable considering that companies can gain critical insights into the Order to Cash process to increase the speed of payments, optimize the Invoice-to-Cash payment cycle, and overall make well-informed decisions from business perspective. Overlooking such solution means leaving the insights related to Accounts Receivable on the table and providing limited understanding for how to mitigate risks, control costs, and optimize the organizations liquidity.

In sum, when examining options for optimizing the Order to Cash process for maximum efficiency and profit, C-suite Executive should not overlook the immense value of Accounts Receivable automation. Without the software, Finance departments run higher risk of late payments; suffer from extra labor costs; and miss out on critical data needed to make well-informed decisions. The investment in Accounts Receivable automation tools may be big decision, but the opportunity cost of overlooking such solution should be carefully considered.