The order to cash process is a comprehensive ordering sequence that begins with a customer order, then order management, fulfillment, and so on up invoicing and payment.
Many organizations today face the challenge that order lifecycle management (OLM) processes span finance, sales, and distribution. While these organizations have deployed CRM and ERP applications as system of record for these processes, it’s not uncommon for them to employ CRM offerings from one vendor in sales and finance applications from another. As a result, many order-to-cash processes continue to be disjointed and disconnected and are still wrapped around spreadsheets, custom applications, and manual processes.
In today’s constantly changing business and payments environment, manually collecting, evaluating, collating and calculating order-lifecycle data is time consuming and error-prone. Manual order booking and revenue recognition through spreadsheets, pose challenges in scaling and handling the transaction complexity of new business models that modern organizations are aiming for.
In addition, increasing regulatory pressure, such as ASC 606 and IFRS 15, demands improved revenue recognition, compliance and reporting. In fact, these new regulations have forced organizations to rethink the entire order-to-cash process.
The O2C cycle starts when a customer makes a purchase and runs through the company's entire order processing system. The cycle consists of multiple sub-processes around the following steps:
Each order to cash sequence may have steps unique to a company’s business model, however generally speaking a common sequence is as follows:
Below is a list of some of the order-to-cash benefits.
With more agility in the fulfillment process products and services that take advantage of the order to cash process often deliver the products or service ahead of scheduled deadlines.
With improved order to cash processes, customer relationships often improve which can lead to increased customer orders.
Order to cash automation processes often streamline customer payments which allows businesses to optimize cash flow resulting in increased agility.
Order to cash processes helps with inventory monitoring that can result in preventing losses or breakages.
The metrics you’ll be able to extract will allow your company to perform an analysis of suppliers and vendors. This analysis offers strategic advantages you may not have had otherwise.
RecVue’s suite of Order Lifecycle Management (OLM) solutions bridges the gap between front office CRM systems and back-office ERP applications. Its designed to manage the entire order to cash processes by seamlessly integrating with other systems of record applications. RecVue’s intelligent Order-to-Cash platform provide a wide set of predictive analytics that enable businesses to identify transactions that represent critical business decisions such as credit risks, the rate of customer churn, and optimal price points to set etc.
As organizations seek to implement multiple types of recurring revenue models, finance and sales teams will need intelligent order-to-cash platform such as RecVue that spans both emerging and legacy business models for 1) Billing Completeness 2) Revenue Recognition under ASC 606 and 3) Revenue share with channel partners – all delivered in one solution.
There are risks to not optimizing your order to cash cycles such as not being able to meet the needs of your customers, which goes without saying has negative impacts on growth and revenue.
Please carefully consider the information you’ve read on this page so you will be better prepared to make critical order-to-cash process decisions.
A single platform embedded with Asset Billing, Asset Payment, and RevenueLearn More