No matter the type of organization or business, the order-to-cash process is essential to solvency and profitability as it ensures an entity is paid for its goods or services. Understanding the order-to-cash process and finding value in automation is critical in achieving maximum efficiency and profitability
The order-to-cash process includes processing the initial order, delivering the ordered goods or services, invoicing for said goods or services, and securing payment. A streamlined process will promote positive cash flow and operational efficiency, reduce accounting errors, and ultimately improve the entire revenue cycle.
By automating the accounts receivable management, which is essentially the last step of the order-to-cash process, a business can experience maximum efficiency. Let’s explore how this works.
Basics of Managing Accounts Receivable
First, it is important to fully understand what exactly happens in accounts receivable management and order to cash processing. Accounts receivable management is the process of a business managing the terms of a good or service provided on credit and obtaining payment in a timely fashion — the last steps refer to the order to cash process. For example, in the medical world, this could involve billing health insurance for a medical procedure. In a non-medical field like a utility company, this would affect the company providing a service, such as power, that they then bill the customer for on a contractual basis.
At its core, accounts receivable management involves sending out invoices, payment reminders, and recording payments, as well as dealing with any disagreements, billing discrepancies, or delays. Managing accounts receivable requires knowledge, attention to detail, and time dedicated to following the accounts.
Challenges of AR Management
Accounts receivable is a core component of any business. Still, even in the best-staffed environments, challenges can persist, slowing down operations, creating opportunities for errors, and really bogging down profitability.
Traditional accounts receivable management involves staff physically processing invoices, checking on their payment, and working through cash flow issues. As a result, order to cash can suffer, along with a host of issues and inefficiencies, including costly errors that can negatively impact payment and the organization’s cash flow.
There are a number of accounts receivable software options that a business may utilize to aid in its management; however, these options often have a high learning curve, can be difficult to update, and may not be compatible with other systems. Not having an efficient accounts receivable management plan can significantly impact the company.
What AR Automation Does?
Though some businesses may be hesitant to engage in accounts receivable automation, it really is the future of revenue cycle management and business accounting. More businesses than ever are automating these processes because they are more cost-effective and beneficial. It doesn’t replace having a financial professional on hand. There are key analytics generated from the automated accounts receivable programming that need to be interpreted by a person.
With accounts receivable automation, manual processes that ordinarily take up a considerable amount of time are completed automatically through software or cloud-based programming. Manual accounts receivable and order to cash processes like invoice generation and delivery, payment reminders, and payment processing are all handled without needing to manually process each step.
Organizations can also benefit from additional services that accounts receivable automation provides, like cash application and valuable reporting. Accounts receivable automation not only takes tasks that ordinarily would be tedious, time-consuming, and susceptible to error but streamlines them with more accuracy, efficiency, and response. The order-to-cash process, in effect, is completely changed for the better.
How Automation Can Revolutionize the Order to Cash Process?
Due to automation, processes become more accurate, efficient, and responsive. Invoices are accurately and immediately generated and delivered to the customer quickly and efficiently—whether online or even by mail. Because there is no manual input, they are often error-free. Follow-ups can be easily made on a predetermined schedule to ensure timely bill pay, making the order-to-cash process effortless.
When the right software is implemented into a system, integration with other systems is a breeze, adding to real-time order to cash tracking, follow-up, and reporting. Ultimately, automating the accounts receivable system results in a wholly revolutionized order-to-cash process.
Additionally, choosing the right order for cash automation will work seamlessly with your sales management programming and other business software.
How to Implement AR Automation Software for Better Order to Cash?
Choosing the right accounts receivable automation software can be daunting, but when working with professionals who specialize in this service, finding the right one for your business will be a breeze.
When looking for an order to cash process and accounts receivable automation company, there are several key performance indicators that you should review. Look for a company that is experienced. Longevity in this business signals that a company is constantly evolving to keep up with its clients’ latest technology, regulations, and needs. Additionally, you’ll want to find a company that has the capability of scaling to your needs, whether you’re a small business or a Fortune 500 company. Review their qualifications, their offerings, and their skill level.
When you have the right company, they’ll be able to install integrated accounts receivable tools right into your existing workflow, offer brief and efficient training, and be available for questions to ensure a seamless transition that doesn’t negatively impact staff or your organization’s schedule.
Choose Accounts Receivable Experts
If you are a healthcare organization, utility provider, in financial services, or media and entertainment, Credence Global Solutions can transform your order to cash processes through accounts receivable automation. Contact us today to learn how we can help your organization!
