Getting more products out the door more quickly lets you maximize your assets. It’s a universal objective shared by everyone from Finance to Operations — and it’s your competitors’ objective, too. Everyone knows you need to spend money to make money, but determining exactly how much revenue each asset generates can be a challenge. Fortunately, there’s a formula to help you figure out exactly that. It’s known as the asset turnover ratio.
What Is the Asset Turnover Ratio?
Have you ever seen this formula before?
Asset Turnover Ratio = Sales or Revenues / Total Assets.
According to the Corporate Finance Institute, “The asset turnover ratio, also known as the total asset turnover ratio, measures the efficiency with which a company uses its assets to produce sales.”
The higher the asset turnover ratio, the better your company is performing. Higher ratios mean that you’re generating more revenue per asset, which is a key indicator of where your organization stands against its competitors. If you want to understand how every dollar in total assets equates to sales, this formula will reveal the answer.
So how can you maximize your assets? The answer is simple: Sales Order Processing Automation.
Improve Your Asset Turnover Ratio With Sales Order Processing Automation
Sales Order Processing Automation is one of the most effective tools for maximizing assets. By accelerating your fulfillment process and streamlining logistics, your company can increase revenues and reduce Days Sales Outstanding (DSO). DSO has a dramatic impact on this figure, which is why it should be one of your key KPIs, especially if you are utilizing Sales Order Processing Automation.
With automation, your organization can streamline and automate business processes to make them faster and less prone to error. In fact, some companies have been able to reduce order processing times by as much as 80 percent.
Why is this important? Faster turnaround means buyers get their bills in a fifth of the time, starting the contractual payment clocks faster and accelerating revenue.
Getting Started With Sales Order Processing Automation
Now that you’ve decided that you want to improve your organization’s asset turnover ratio, it’s time to plan for your automation implementation. Before you start to worry, here’s some good news — it doesn’t take much to optimize your order processing workflow.
Our proven sales order processing system integrates directly with your ERP, making IntelliChief a safe and reliable component of your digital infrastructure. IntelliChief helps you bill your customers faster and track the status of every payment. It electronically captures all your documentation at its point of origin, then indexes the relevant content and organizes it in an Enterprise Content Management (ECM) system. It even communicates with your ERP or line of business system, synchronizing your databases and updating your customer activity records in real-time.
So, what does this mean for your business? It means you have the opportunity to deploy cash assets into capital investments. You can enhance everything from sales and customer service to production and fulfillment.
Interested in learning more? Read our Sales Order Processing Automation white paper or contact us.