The Unseen Consequences Of Not Adopting Order To Cash Software
AUTOMATING THE AR PROCESS
The Order to Cash process involves managing parts of the Procure-to-Pay process starting from sales orders’ approval and till the customer payment is received. it is an essential function in Customer Relationship Management (CRM) and is used by many enterprises to optimize operational efficiency and maximize profits. Unfortunately, this very process has not been automated in organizations across the world due to lack of awareness or software applications.
The failure of organizations to automate their Order to Cash process can lead to severe risks, particularly from an operational and financial standpoint. Many of these risks are overlooked but may have an immense detrimental effect on companies financial health, cash flow, public image, and employee morale. Here, we detail the financial and operational risks posed by not implementing order to cash software.
Operational Risk
The inability to automate Order to Cash processes can lead to various operational risks. Manual processing of data increases the chances of receiving inaccurate customer information, wrong pricing or unseen discrepancies that can delay the sales transaction. Furthermore, the manual process of reconciliation and payment collections can lead to delays in customer payments, further exacerbating the challenge. This affects the customer relationship immensely as customer satisfaction is greatly reduced due to delayed services.
Financial Risk
The timely collection of payments is essential for any organization to stay solvent and profitable. The lack of automation during the order to cash process can severely impede companies financial health by increasing the days outstanding in accounts receivable (DORA). This would lead to higher concentrated costs for follow up calls and dispute resolution. For example, an increase in the operational costs associated with customer service and accounts receivable could negatively impact the companies bottom line.
Furthermore, the manual collection process can lead to higher risk of losing credit or even outright fraud. This could have devastating effect on the companies accounts receivable, leading to losses that could take months, or in some cases years, to regain.
It is clear that organizations must prioritize automation of the Order to Cash process to maximize profitability and customer satisfaction. Organizations are doing so by adopting Cloud-based customer order-to-cash solutions that not only streamline and improve operational efficiencies, but also provide automated customer payment, invoicing, and customer service processes. By investing in the right order-to-cash software, organizations can manage their credit risk better, reduce DORA, and gain improved visibility, allowing for quicker and more informed business decisions. In short, businesses that focus on implementing automated customer order-to-cash solutions, stand to gain greater financial stability, improved customer service and sustained customer relationships.
