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The primary way most companies measure AR performance involves looking at the Days Sales Outstanding (DSO) metric. Accelerating sales can increase DSO, but most often the cause is problems in the order-to-cash (O2C) pipeline affecting collections. Need help improving cash flow?
In essence, the customer has payment options that, coupled with today’s digital platforms, provide a seamless opportunity in the order-to-cash process. Risk Mitigation – A seldom noted but important point is that a properly implemented program can reduce your risk of slow payment, fraud, and default within your portfolio.
The bottom line was a 13 percent reduction in Days Sales Outstanding (DSO) over a 6 month period in conjunction with invoice accuracy rising above 90 percent. it just might help them pay you sooner! Share A Case in Point A parts distributor was having difficulty with collections and high dispute volumes. Revenue or Profits?
In order to maintain optimal cash flow, your accounts receivable (AR) portfolio needs to remain in good shape. That can be a constant battle because all the mis-steps made during the order-to-cash (O2C) process will accumulate in your AR, and given time, clog it up.
These can include: Too little time spent collecting (due to other priorities or lack of staff) Lack of training and experience Order-to-cash (O2C) process breakdowns or weaknesses Credit policy too lenient Invoice accuracy issues Collection strategy not effective Economic headwinds And, the list goes on.
To optimize the order-to-cash (O2C) process, it's crucial to understand the significant role Credit and Collections plays. This function must collaborate closely with sales, fulfillment, shipping/logistics, and accounting, all of which are integral to converting an order into cash.
By automating tasks such as invoicing, payment tracking, and collections, businesses can reduce manual intervention, minimize errors, and accelerate the order-to-cash cycle. Assess Current AR Processes Evaluate existing AR workflows to identify inefficiencies and areas that would benefit most from automation.
In fact, a hands off approach will only serve to compound the weaknesses in your order-to-cash (O2C) process. Poor Credit Controls: Poor credit control practices can result in providing goods or services to high-risk accounts that are likely to pay beyond terms or even default on payments. Laissez-faire doesn’t cut it.
If the automated AR application can alert the collection team about the probability of any payments getting overdue, they can proactively reach out to such customers to try mitigating the risk of a likely payment defaults. Businesses need quick order to cash conversion that is supported by an efficient account receivable processes.
Optimizing the Order-to-Cash cycle: Accounts receivable teams trust Serrala Radically simplify even the most complex transactions, automate invoice posting, get paid quicker and with full visibility and compliance across your entire customer ecosystem. Bild What can our AR solutions do for you? section-marketo-background').length>0){
If customers default on their payments, this can have serious consequences and provide important insights for the credit management department. Finally, customer segmentation helps reduce the risk of payment default and achieve better results for the entire customer portfolio. But does this also apply to credit management?
If customers default on their payments, this can have serious consequences and provide important insights for the credit management department. Finally, customer segmentation helps reduce the risk of payment default and achieve better results for the entire customer portfolio. How to lower your DSO.
Serrala helps you reduce the burden of financial management on your teams with intelligent invoice-to-payment, invoice-to-cash and treasury automation solutions that unify your business’s finances, boost decision velocity, and let you apply working capital quickly and accurately to strategic and tactical concerns. length>0){ jQuery('.mktoFormRow','fieldset[data-wrapper-for~="col1"]').each(function(i,
Read more Learn more Discover how Serrala solutions are transforming the way utilities businesses handle their finances SUCCESS STORY Suez Water Technologies and Solutions – optimizing order to cash to reduce DSO Suez Water Technologies and Solutions help industries worldwide solve their toughest water, wastewater, and process challenges.
How Collections Can Fall off the Rails One of the common themes driving business clients to engage my services involves rising Days Sales Outstanding (DSO). In some cases, the cause has been a structural problem unrelated to their collectors’ efforts, situations caused by upstream issues in the order-to-cash (O2C) process.
Since then, there has been continuous improvement towards the holy grail of straight-through-processing (STP) across the order-to-cash (O2C) process. Improved Cash Flow and Forecasting EIPP accelerates the cash conversion cycle by accelerating invoice delivery, thereby enabling faster payments and reducing days sales outstanding (DSO).
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