Days Sales Outstanding (DSO) is a financial metric that measures the number of days it takes a business to collect payment from its customers. It is calculated by dividing the total amount of accounts receivable by the average daily sales. A high DSO indicates that a business is having a hard time collecting payments from its customers, which can negatively impact cash flow and financial stability. there is a clear need to reduce DSO for businesses.
Accounts receivable automation can help businesses reduce DSO by 40% or more by streamlining the process of managing and collecting payments from customers. Automation can help businesses to improve their overall efficiency and reduce the time and effort required to manage the accounts receivable process. This can help businesses to improve their cash flow, reduce financial risks and increase the predictability of revenue.
One of the main benefits of accounts receivable automation is that it can help businesses to improve the accuracy and efficiency of their invoicing process. Automated systems can automatically generate and send invoices to customers, which can help to reduce the risk of errors and improve the timeliness of invoicing. This can help businesses to improve their cash flow by ensuring that they receive payments in a timely and efficient manner.
Another key advantage of automation is that it can help businesses to improve their credit control processes. Automated systems can automatically flag customers who are consistently late with their payments, which can help businesses to take action to mitigate any negative impact on cash flow. This can include implementing late payment fees, re-evaluating the creditworthiness of the customer, or even canceling the customer’s account.
Automation can also help businesses to improve the accuracy and efficiency of their financial reporting. Automated systems can collect and aggregate data in real time, which can help businesses to generate accurate financial statements and reports. This can also help to identify any discrepancies or errors in the data, allowing businesses to take corrective action quickly.
Additionally, automation can also help businesses to improve the overall efficiency of the accounts receivable process. By automating repetitive tasks such as data entry, the system can reduce the risk of errors and improve accuracy. This can also help to reduce the need for manual follow-up, freeing up time for other tasks.
In conclusion, accounts receivable automation can help businesses reduce DSO by 40% or more by streamlining the process of managing and collecting payments from customers. Automation can help businesses to improve the accuracy and efficiency of their invoicing process, credit control processes, financial reporting, and overall efficiency of the accounts receivable process. This can help businesses to improve their cash flow, reduce financial risks and increase the predictability of revenue.
Kapittx is a Software-as-a-Service (SaaS) platform to automate the critical process of Accounts Receivables or Debtors. It enables various stakeholders like Sales, Accounts, Logistics, and Customers to collaborate effectively and get paid faster. Founded in 2019, by veterans in the Payments, Finance, and Technology domains, Kapittx is built to integrate with your existing processes seamlessly. The easy-to-use interface, enables businesses in diverse fields like manufacturing, services, technology, transportation etc customize it to their own unique requirements. Kapittx recognizes that each industry and each company handles receivables in a different way and aims to eliminate the barriers to getting paid faster.
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