The importance of outsourcing the order-to-cash cycle transcends the reduction in cost by bringing working capital in desirable condition. By giving boost to working capital, deals can be helpful to company in improving its debt-to-equity ratio, in reducing its external financing needs and in enhancing its credit ratings.
In order to reinforce A/R functions and improve cash position, more and more businesses are moving towards to third-party service providers. There is inclusive set of A/R functions, often term as order-to-cash cycle, in which people are increasingly outsourcing their full range of accounts receivable processes: order management; credit; invoicing; collections; dispute management; cash application; and, in some cases, reporting and analysis.
The order-to-cash cycle kickstart with a customer credit check and concludes when the customer's payment is received.
Order-to-cash outsourcing arrangements improve the A/R process in such a way that it delivers much more than the efficiency gains. According to the notion of advocate,” It's not just about cost per transaction; it's also about making sure that you are accelerating working capital."
Transferring the order-to-cash cycle to a third-party provider may be a huge challenge to go through but it offers potentially hefty rewards. The F&A outsourcing growth curve is still in its early stages, and order-to-cash outsourcing has taken pledge to fuel that growth.
Joseph Wright, a London-based senior manager in Accenture's finance and performance management service line, identifies key performance indicators (KPIs) for each stage of the order-to-cash cycle, including the following:
Order management: percentage of orders received electronically, percentage of customer calls taken on initial contact and number of order input errors
Credit management: average credit approval cycle time and percentage of debt
Order fulfillment: percentage of orders delivered to customers in full quantity at the specified time
Invoicing: percentage of invoice accuracy (i.e., the proportion of invoices with invoice errors relative to the total number of invoices raised); percentage of invoices requiring manual intervention; and percentage of invoices issued electronically
Cash collection: percentage of cash collected within agreed credit terms (excluding invoices subject to customer query) and percentage of cash collected electronically.
To reap these benefits, finance executives need to master the intricacy of the order-to-cash cycle, which tends to cross several corporate functions and which varies, sometimes significantly, from one business to another. Yet, they must remain highly sensitive to customer satisfaction metrics as many A/R processes directly touch customers and the revenue they deliver.
Wright make a remark that companies can adjust and augment these metrics by factoring in overall cross-process KPIs such as DSO and total process thru put time.
Order To Cash Process
In the last edition of this series, we examined the kinds of ezine ads that would be profitable to anyone at any point in time. We weighed the pros and cons of using ezine ads and the best profitable one. In today’s edition, we’ll be exploring using articles to sell your products. Don’t fret as it is quite easy. A lot of people seem to shrink at the mere though of writing articles. If you think you cannot, you can outsource them. Websites like rentacoder.com, elance.com, freelancewriting.com offer writing services.
After you have your articles ready –I’ll suggest you write about 10 articles on the first day- use five of them to create a mini course or an ecourse. Then post the remaining five to the following article directories:
Submitting your articles to this list of websites –there are so many article directories if you look for them- will undoubtedly bring you traffic depending on your bylines, quality of articles written and the niche you are writing in.
After submitting to the article directory, create a 5-part mini course loaded with information that is tied to the product you want to promote. Then load it on the autoresponder service you use. Getresponse and Aweber are very good. You can get them www.getresponse.com and www.aweber.com. The reason you need this is to get your subscribers’ email address so they can get the ecourse you are sending them and in the process, get to see your adverts or recommendations which would result in them buying your products. When you sign up with the autoresponder service, they provide you with a code that you have to place on your website. When you place this code on your website, it appears like an email address and name bar. This is where people will enter their details and voila, you have their email address.
Once they sign up, they’ll keep getting the course you have provided for them. During this period, some will buy while others will not. But the most important thing is getting their email address. So, if they don’t buy from you today, they could buy tomorrow. In the meantime, continue writing articles. If you wish, you might decide to extend the length of the ecourse. But one very impressive tactic I have seen used by a famous internet marketer is after they get the last course on day 5, send them another one on day 6 but in a different format. What do I mean? Compile the whole course into a PDF file and ask them to download it so they could continuously refer to it in their daily activities. Include giveaway rights to it too. So, they’ll be able to pass it along to their friends and colleagues. This goes on to become your marketing agent. This works like magic because your subscribers have a higher perceived value of the ecourse now compared to what it was when you were just sending it in emails. As a result, you could even profit from people who never signed up for your ecourse but have the report you compiled.
Both Viswas Ray & Aurelius Tjin are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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Avatar The Last Airbender Book 3 Chapter 13 The verse talks about Abdullah Ben Salam who was the top Jewish religious leader at the time of Muhammad and he converted to Islam and said that in the Torah there are many prophecies about Muhammad! ...