Corporations Benefit By Unlocking Working Capital
Corporations with proactive working capital management solutions improve their cash flow by reducing the incidence of late payments, improving collections and harnessing the availability of transaction data. Exceptions and errors, as a primary cause of late payments in the B2B sector, cause invoices to fail the customerÆs three-way AP reconciliation test and trigger high DSOs (Days Sales Outstanding) rates. Since significant revenue leakage is caused by inadequacies, the auto-detection of errors and exceptions early in the quote-to-cash cycle can decrease problem invoices by up to 90 per cent, according to GT News.Stronger business controls for pricing, discounting, blanket POs and invalid PO numbers reduce the scope for errors or exceptions on invoices, which in turn eliminates revenue leakage from incorrectly applied discounts and adds millions in annualized returns to a companyÆs bottom line. Enterprises running software on existing ERP and legacy systems instead of building additional silos most easily access data already in these systems, while achieving solid returns from reducing their DSO rates. With 18 to 35 per cent of outgoing invoices at a typical Fortune 500 company failing the customer AP reconciliation test, æneutralizingÆ inefficiencies in the quote-to-cash cycle is the most effective way to cut DSO and free up working capital. Related Links:
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