As we all know, the order-to-cash process entails every step from order placement all the way through payments. A robustly developed and automated Order-to-Cash (O2C) process empowers the organization to move swiftly and automatically through these steps in the order process:
- Customer onboarding / Order creation
- Sales order release and inventory reservation
- Packing and releasing the items
- Shipping and tracking shipment
- Payment receipt
More advanced and well managed O2C systems also enable additional value-added processes outside of the O2C stream, such as, collections for late payments and allow follow-on marketing efforts.
In this era of digital-first economy, an automated O2C process is critical for an efficient and error-free process that eventually impacts the organization’s bottom-line and financial performance. Improved financial systems and well managed collections and invoicing, not only improve cash flow, but also deepen customer relationships through effective customer service. However, on the other hand, discrepancies in invoicing or collections can negatively impact the company’s image, customer loyalty, and cash flow. Not modernizing the financial systems can lead to delay in processing orders, incorrect invoicing, redundancies, inappropriate credit adjustment, and other O2C related failures, resulting in poor customer experience and customer attrition.
Why Automate the O2C Process
- Accurate customer onboarding and data collection
When an organization automates its order-to-cash, business-critical data gets collected and recorded throughout the process, such as, purchase details, customer details, product details, order and payment timeliness, bad debts, etc. This information provides key triggers for carrying out focused marketing efforts and efficient follow ups.
- Enhanced efficiency and lower operating cost
Even though, accurate customer onboarding is critical, it is however still only the first step in the O2C process. It is imperative that the order entry and billing process are handled accurately as well, without which the entire process can fail. Automating the process helps save both cost and time by eliminating errors and manual entries, while eliminating redundancies. The innumerable benefits also include eliminating delays in order, billing, fulfillment, and receiving payments thus giving a boost to cash flow and working capital.
- Powerful analytics and data-driven insights
Organizations can leverage software and services to transform data into actionable insights that impact an organization’s strategic and tactical business decisions. Business intelligence tools can be deployed to access and analyze data sets and present analytical findings in reports, summaries, dashboards, graphs, maps, etc., to provide users with detailed visual intelligence about the state of the business and use the data to drive strategic decisions.
- Optimizing partner payments
In today’s dynamic and unpredictable times, organizations are navigating through stiff challenges such as, assessing ROI on partnerships, managing partner contracts, generating performance reports, and meeting compliance requirements. The absence of automation in the finance process can hold back an organization’s capability to expand their partnership programs, which can significantly impact revenue streams. Ambiguity in areas like contract compliance and determining partner compensation are complex challenges organizations also navigate through. As a business scales, volume of invoices and payment obligations on the accounts payable (AP) side, only surge. The complexity compounds as those partnerships expand across borders and adds to the challenge of managing multi-currency transactions.
Automating the O2C process seamlessly connects the dots between orders placed, invoicing, payments made by the customer and third-party payment allocation. Payments from various transaction mediums are updated in the general ledger automatically, which in turn reduces cost and time by eliminating errors and manual entries, resulting in an optimized order-to-cash and streamlined partner-to-pay process. Organizations are gaining competitive advantage by modernizing their legacy systems and embracing digital transformation.
Some key benefits that businesses are leveraging through automation are:
- Reduction in days sales outstanding which is essential in improving a company’s cash flow
- Reduction in the order to payment cycle time, enhancing the working capital
- Greater visibility into the process with faster dispute resolution and minimizing cash flow interruptions
- Improved accuracy of invoicing, collections and cash flow reports and quicker identification of unpaid invoices
- Accurate revenue recognition and seamless partner payments
No wonder, finance leaders around the world agree that O2C automation, if implemented properly, can improve the efficiency of the order-to-cash process immensely. Not only does it deliver back-end efficiencies, but it also helps strengthen relationships both with customers and partners, ultimately impacting the bottom-line.
While, embarking on a financial and digital transformation journey, it is essential for any business looking to grow and stay ahead of the competition, to partner with the right monetization platform. By adopting a platform like RecVue, during a digital transformation initiative, it can be a game-changer in terms of leveraging technology and automation to deliver performance optimization as well as time and cost savings. RecVue’s unified platform integrates with any ERP, CRM and front-end order processing systems, enabling customers to improve efficiencies across order-to-cash, revenue and general accounting, while gaining real-time access to data. Finance groups are able to increase accuracy and timeliness of billing and invoicing and aggregate billing information in a single system to improve analysis and forecasting. RecVue’s monetization platform includes a 360-degree view into the entire contract lifecycle, rules-based attribute pricing, complete order-to-invoice capabilities, pay-side management for third party obligations, and robust analytics and reporting.
Contact us today for an O2C assessment and learn more about our revenue management capabilities. Get empowered to deliver on your organization’s digital transformation goals and make your business future proof.