The Risk Of Failing To Leverage Order To Cash Software


For finance executives looking to maximize the efficiency and effectiveness of their companies’ cash to order cycles, leveraging order to cash software is must. Unfortunately, many executives fail to understand the risks and consequences of failing to utilize appropriate software solutions. Neglecting to do so can lead to number of costly, potentially damaging issues.

The introduction of order to cash software is most often undertaken to address operational and organizational shortcomings in the management of the receivables, procurement, and overall sales order life cycles. Ina proper, optimally functioning order to cash process, all transactional elements, such as invoices, delivery notes, payment, billing and collection are brought together within single cohesive system. This provides companies with an overview of all components, thereby enabling them to better manage the flows from order to cash, as well as reporting and insight into current and historic performance.

Not leveraging order to cash software in timely manner can leave companies exposed to variety of potential problems. Some of these include delayed payments, lack of visibility and control over the order, reduced accuracy in the order entry and billing processes, insufficient risk controls and inefficiencies in the reconciliation and payment process. With the above issues in mind, there are two particularly significant risks associated with not utilizing comprehensive order to cash software solution: 1) an extended exposure to debtor risk, and 2) an increased risk of overpaying vendors.

In regards to debtor risk, failing to utilize order to cash software can result in delayed payments, with some customers paying late by months or even years. In addition, the lack of detailed reporting can create issues for both internal stake holders and external auditors. Not leveraging order to cash software can also cause an excess exposure to debtors, obstructing the companies ability to accurately and effectively monitor and manage debt concentrations.

The additional risk of overpaying vendors can be caused by overlapping discounting structures, as well as errors due to an outdated manual process. Having order to cash software in place can ensure that discounts are taken in timely and efficient manner, thereby enabling businesses to save on their purchases. Furthermore, order to cash software can help to prevent manual errors, thereby reducing the companies risk of overpaying vendors.

It is clear, then, that the failure to deploy order to cash software in an efficient and timely manner can have potentially damaging and costly consequences. complete software system can help to prevent errors and ensure timely payments, whilst also enabling companies to save on their purchases. As such, finance executives would be well advised to leverage appropriate order to cash software solutions to ensure the smooth and efficient operation of the cash to order cycle.