Accounts Receivables

Simple Techniques To Enhance Your Order-To-Cash Process Efficiency

Posted on 13/04/2017

The order-to-cash/Accounts Receivables cycle in businesses is full of complexities. There are too many interactions that take place in the OTC/Accounts Rceeivables cycle and there is always room for Cash Process Efficiency enhancements in the process. True setback comes from the reliance on the hackneyed manual processes and the absence of a smooth transactional information flow. These are the major impediments that contribute to the inefficiencies and the increased operational costs.

Accounts Receivables

It is established that there are quite a lot of interactions involved in the OTC/Accounts Receivables cycle. It is significant to note that papers are an inevitable part of the information flow between the company and the third party vendors, thus being responsible for the inefficiencies and challenges in the performance. Computerized receivables have been in use for over 5 decades now yet there is an incorrigible reliance on the paper and manual based processes. This is due to the fact that there is no connectivity between the internal functionalities besides the flow of accounting information and sales, inventory, shipping, and receivables. Things get exacerbated when there is an input is required from the customers or other third party vendors during the intermediate processes.

Manual tasks are still being used in bridging the gap between the Receivables processes and the external parties and this imposes the biggest challenge. Though there are software like ERP (enterprise resource planning) are widely used now to provide the integration that is lacking in the manual processes, manual processes are still being used. So, what is the result? A lot of time and labor are being invested in the OTC process, increasing the costs and operational inefficiencies.

How do we go about increasing the Order to cash/ Accounts Receivables efficiency?

You need to build strong connections between all the internal processes and wire them in an automatic process. The only hitch you might be facing is the expenses. Plus, it would also require some rewriting of the interfaces when you upgrade the systems. Luckily, cloud-based solutions increasingly seem to address the issue at hand. Cloud-based solutions also provide much stronger connectivity links between all the participants, be it internal or external. Now, this is more affordable than any other hosted or licensed solutions out there.

Advantages of Automated processing:

  • Customer payments can be accelerated due to instant accessibility of bills and other data
  • Invoice chasing can be streamlined
  • Customer disputes can be prevented
  • The need to re-key order information can be removed
  • Scanning and filing of invoices can be eradicated
  • Storage costs can be reduced
  • Office space will be freed

Should you require help with enhancing your OTC efficiency, do contact Joyce at +1-516-717-2049.

Topics: Accounts Receivables , Outsourcing Accounting


Top 5 Practices For Account Reconciliation

Posted on 13/02/2017

Account Reconciliation is very important for CPAs and accounting firms. If they are not handled effectively, they can be time consuming and exhaustive.  Below are some of the practices for you to handle account reconciliation in a whole new perspective:

Account Reconciliation

  1. Prioritizing the Balance Sheet

Strategically planning your priority is the key approach. This method is also called “risk based prioritizing.” You need to identify the accounts that have high chances of becoming erroneous essentially. This can be done by ranking the risks as high, medium, and low. Ensure that risks that are ranked high should be given more importance. You can also set times for each category. For example, you can set time frames like monthly, bimonthly, quarterly, etc to process the accounts. You need to thoroughly analyze the accounts both qualitatively and quantitatively to categorize each account.

  1. Standardization

You need to identify one “Best Practice” and ensure that you communicate the same to all the departments of the organization and everyone follows it as told. For instance, a company has to standardize the accounts reconciliation process, policies, templates, etc across the whole organization.

  1. Monitoring the process

Every member of a team should stay updated with the process going on. This may not work as desired if the team does not have a leader. When we talk about leading a team, it doesn’t mean that this leader should be from management; any person at a lower grade who has the flair to run the show will work. All he has to do is ensure that all the team members finish the tasks on time, follow up with late or unfinished reconciliations.

  1. Utilizing technology effectively

Technology these days is playing a vital role in the reconciliation process. Use the software from companies like Trintech, Hyperion, and BlackLine. These companies have designed software which has made the accounts reconciliation process much easier. Some important features of the software include automated balance interfaces, automated notifications for the users, real-time dashboards, etc.

  1. Improvements driven by metrics

The leadership in monitoring the processes can also take care of the performance enhancement and improvement by utilizing the metrics available. There are certain metrics that should be reviewed at regular intervals like a person’s or department’s completeness, material reconciling items, and overdue reconciliations. This can also help enhance the above mentioned standardization process.

Contact Joyce @ +1-516-717-2049 to know more about reconciliation and handle any of your accounting activities.

Topics: Accounting , Accounts Payables , Accounts Receivables , Outsourcing Accounting


Managing Your Payables And Receivables

Posted on 05/10/2016

Are you having troubles managing your payables and receivables? We have been there done that! As you know, managing your payables and receivables is the most significant aspect of your business in all stages. You may get overwhelmed with the kind of cash you’d have to handle, and keep everything intact and going. Fret not, below are some really simple techniques you can adopt to disentangle yourself from all the payables & receivables hassles.

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Payables:

Managing your payables can be a tricky business. For one, pay all your bills; do not let your unpaid bills linger any longer. The more prompt you are in your payments, the more reliable you become to your suppliers and lenders. Plus, there’s nothing like an unpaid bill that’s a dire threat to the business.

You can take complete advantage of the credit time limit given to you. For example, if your bill is due in the next 20 days, you do not have to pay the bill ahead of your time; rather you can use the cash for something else and pay this bill when it is due.

One other imperative thing you must do is to choose your suppliers wisely. Watch out for the ones that can offer you flexible payment options or that the ones that give you good discounts to pay upfront.

Receivables:

Nobody would have any problem running a business if they get paid for their products/ services on time. But that’s the hitch. Not everyone is prompt in their payments. Yet, you can do several things to collect the receivables efficiently:

  • Invoice your customers promptly. Do not procrastinate in sending your invoices, as it is quite obvious that your payment will be procrastinated too.
  • Do not give credit limits to your customers unless they are trustworthy. Enable COD (cash on delivery) for the customers; this will wipe out the painstaking process of following up for payments.
  • Offer lucrative discounts for the customers who are regular with payments. This will also give them a chance to make the payment then and there.
  • You must entail your customers to pay a deposit amount to use a product/ service if the invoice amount is huge.

Managing your payables and receivables can be easier if you outsource this to somebody who is experienced at the same time cost effective; on outsourcing to reliable hands, you can make use of the opportunity to concentrate on better things like working towards expanding your organization. Contact Joyce at +1-516-717-2049 to seek more information on Account Payables and Receivables.

Topics: Accounts Payables , Accounts Receivables