Companies make money by sending invoices and receiving money. What many do not realize is they also spend money with manual invoicing. The cost of postage, along with the costs associated with paying the accounts receivable team, can cut into a company’s bottom line. This can be remedied with the proper order to cash process.
By setting up invoicing as part of the order to cash system, companies can have invoices electronically generated and sent out to customers. These invoices can be generated from purchase orders created by the system. This supply chain solution helps companies in various ways.
First, of course, it eliminates the need for postage. Instead of printing out and submitting an invoice via the mail, it will be sent out electronically. If a company sends out hundreds of invoices a month, this can save a great deal of money. Even if a company does not send out a lot of invoices, it will still help them save money. It will also help them save time since people will not have to stuff envelopes and go to the post office.
Second, it ensures that the invoice is received in a timely fashion. Delays with the mail system lead to delays with payment. When payments are delayed, a company can have a negative monthly cash flow, which can hurt the business.
Third, it makes tracking invoices easier. Companies can easily see if an invoice has been received electronically. Companies can make this process even simpler by collaborating with their customers so the invoices are placed into their systems directly. Appterra integrates these processes so companies do not have to worry about setting everything up on their own.
Fourth, the system cuts down on human error. When invoices are manually created, printed, and mailed, there is a chance that the wrong information will be used. If the wrong amount is used for the invoice, it will be difficult for the company to fix it and get the money they are owed. Additionally, if an employee accidentally overcharges the customer, it could cause the customer to lose trust in the company. That could hurt, and possibly end, the relationship.
Companies should add as much as possible to an automated order to cash system so they can eliminate human error and save money. The right supply chain management system can take a company out of the red and place it firmly in the black.