Order-to-cash (O2C) is a business’s most crucial and complicated process, yet it has lagged behind when it comes to innovation. Most companies make O2C improvements only after a crisis. In a growing digital economy, efficient order-to-cash processes help businesses become more financially strong. A well-managed invoicing and collection regime can improve cash flow while enhancing customer relationships via order placement and completion. Any lag in invoicing or collections process due to O2C-related failures can negatively affect the business’s cash flow and result in dissatisfied customers.
Listed below are the six significant steps involved in the O2C process in most businesses:
- Order management
- Credit management
- Order fulfilment
- Invoicing and billing
- Payment collections
- Reconciliation & revenue recognition
O2C Platforms And Automation
Experts at KredX agree that automation is essential to implement an efficient O2C process that benefits the business on a large scale. Integrating automation can automatically consolidate details and trigger the next step without errors and human intervention. It allows employees to engage in much more value-added tasks than mundane data entries.
Although an end-to-end automation process might look like a simple process, it can be complicated given the execution of certain elements, such as onboarding and collection processes. We know that the O2C process operates behind the scenes, but an end-to-end integration will primarily refine most aspects of the customer journey. Its approach will intersect through multiple departments across the business, benefitting collections, sales, finance, marketing and customer service.
Advantages Of An Automated, Seamless O2C Process
Modifying your order-to-cash process can make quite an impact on your business. Let us closely discuss the benefits that a seamless O2C platform can deliver:
A well-managed platform will help increase goods availability, implement dynamic pricing, efficiently block frauds, and double the sales revenue.
With automated functions such as order placement, digital invoicing and cash application, and reduced manual efforts, there will be lesser delays and better fulfilment of orders.
- Reduced Days Sales Outstanding (DSO)
Well-calculated stock levels, lower TATs, minimal locked-up revenue in collections, and an assertive dunning module will help shorten DSOs.
- Customer Satisfaction Boost
Owing to automation, businesses have seamless order experience, real-time solutions and better transparency that gives customer satisfaction the boost it needs.
- Improved Employee Satisfaction
With more constructive and less repetitive work, employees get more time to plan business strategies that result in better innovations.
Automation In Cash Management: The Future
Enterprises must remember that transforming their O2C platform can be a significant business driver besides valuable resources, healthier cash flows, and transparency. Cash Management Solutions at KredX integrates with your ERP and automates the entire process, from customer onboarding to collections.
Facts say that when end-to-end process data is integrated, it gives rise to newer insights, contributing to being a better service driver. For example, it helps create different payment channels for new and old, low-risk and high-risk customers by differentiating their creditworthiness through data. Therefore, enterprises need to have their end-to-end service designed so that they get to benefit from palpable value creation.