One Simple Trick to Speeding Up the Order to Cash Cycle

The order to cash cycle, from the moment a customer makes an order to the moment you receive payment, can be handled partially from your ERP system. Handling quoting, order processing, shipping and logistics can all easily be entered and automated, however, you’re missing out on powerful accounts receivable functions. Although your ERP system is great for some of the order to cash cycle, you truly need a solution that will automate invoicing and customer communication to ensure you get paid on time.

An accounts receivable solution that will automate your order to cash cycle should have these 4 functionalities:

  1. ERP Integration
    First and foremost, the solution should be able to integrate with your ERP system. If you want to be able to automate the process and eliminate manual entry, the accounts receivable solution should be able to pull in data. This includes accounts, contacts and storage of documents. Without integration, you’re still stuck with a lengthy order to cash cycle.
  2. Credit Management
    Deciding who you should extend credit to and which customers you should let go is a difficult process. You don’t want to lose out on a good customer, but you also don’t want a bad customer to ruin your finances. A powerful accounts receivable software should integrate with the National Association of Credit Management’s database, giving you up to date information on new customers, making your decisions easier. Further, you should be able to define custom credit scoring formulas and keep track of your current customer’s credit.
  3. Customer Communication
    Half of the time that managing accounts receivable takes goes towards communicating with the customer. To ensure that you get paid in a timely manner, you need to keep in touch with customers, sending reminders of payments due. An accounts receivable solution should keep track of these communications and allow you to document them, receiving your payments faster in the order to cash cycle.
  4. Workflows
    The fastest way to get paid on time is to prioritize who you should call first, whether that is the customer with the most money owed or the customer with the longest delayed payment. Workflows in an accounts receivable software should allow your collection management team to see who to call and email and what invoices triggered that action based on rules defined in the system.

Your ERP system may be able to manage the quoting, order processing, shipping and logistics of the order to cash cycle, but it falls short on invoicing and collecting payment. An accounts receivable software can pull in all the data you need from your ERP system and then automate the rest of the process for you. By eliminating unnecessary time spent managing collections, you eliminate unnecessary time waiting for payment.

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