The Perils Of Order-To-Cash Automation Without Software


Given the complexity of the order to cash management process, transitioning from paper-based process to automation can appear to be daunting task. Companies often perceive lack of software solutions to handle the financial processes as significant barrier to entry into automation. However, this risk has to be tempered by considering the detrimental effects of not automating the order to cash cycle.

One of the key drawbacks of not automating order-to-cash is an increase in manual errors. Lack of an automated system means that companies have to rely on manual processes, thus enlarging the scope for unintentional mistakes and leading to costly misapplications. Such errors can arise from incorrectly inputting data, incorrect classification of invoices, or miscalculation of credits. These in turn can result in reduced customer satisfaction and, in some cases, prolonged shipping delays.

Another major risk posed by manual systems is the increased time it takes to complete the order-to-cash cycle. Without software enabled automation, companies have to have staff manually allocating payments and manually matching invoices. This significantly slows the entire process, often leading to delays in collecting payments and invoicing customers. This is compounded by the fact that any manual errors will further draw out the process, costing the company money and other resources.

Moreover, the lack of automation can create situation where companies lack complete understanding of their order to cash process. Without access to consistent data, companies are unable to monitor their processes and identify inefficiencies or areas that require attention. This means they are left in the dark as to where they can create cost savings, or identify product-based billing opportunities, or even spot customer payment delinquency issues.

In conclusion, lack of order-to-cash software can be immensely costly to company. While the cost of software needs to be taken into account, it needs to be balanced against the potential risks of not using software for order-to-cash automation. Such hidden costs can include loss of customer satisfaction, prolonged cash cycles, and lack of understanding of their own process. An astute CFO, therefore, needs to weigh in all these factors while deciding whether to invest in software for order to cash automation.