What is the order to cash process? And how can automation elevate yours? (2022)

Note: J.Alan Goddard, a Director at Connor Group, also contributed to this article.

A high-performing order to cash process benefits your business in all sorts of ways.

It allows for a frictionless experience for clients and employees; it improves your cash flow; it enables billing and revenue recognition to operate seamlessly—and a whole lot more.

These benefits point to why so many organizations are looking to optimize their process.

How do we know? The team at Workato analyzed the automations that hundreds of their clients have implemented over the past year and found that order to cash (O2C) was the most automated process; furthermore, the process has seen a 233% spike in automation adoption.

This might leave you wondering how your team should leverage automation across your own order to cash process.

While the question is simple, the answer is more nuanced: It depends on where you are in your automation journey.

We’ll explore each level in this journey so that you can identify the automations that make the most sense for your team, but before we do, let’s align on the definition of order to cash.

What is the order to cash process? And how can automation elevate yours? (2)


Looking for a deep dive?

Our whitepaper breaks down each stage of the O2C maturity roadmap in detail.

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What is order to cash?

Order to cash, which also goes by O2C, otc, order to cash process, and order to cash cycle, is an organization’s end-to-end order processing system. This business process includes everything from invoicing the new client to performing reconciliation and revenue recognition.

Here’s more on each of these steps:

Note: These steps can look different at any organization, as they’re influenced by your business model, tech stack, data architecture, among other factors.

1. Order management: Once the customer order is added to your order management system or ERP, the appropriate parties get notified and can work toward fulfilling it.

2. Credit management: Clients who qualify to receive credit go through a specific approval process; they can be denied or approved automatically, but more complicated scenarios may require an employee in finance to get involved directly.

3. Order fulfillment: Your fulfillment team delivers your product; all the while, the inventory in your reps’ CRM gets updated—preventing them from selling more of a product that’s unavailable.

4. Invoicing and billing: The client receives the invoice, which reflects the terms agreed upon in their order.

5. Payment collections: Your organization’s accounts receivable team receives the payment, whether it was delivered online or offline.

(Video) Easily Automate Your Collections Process | Best Collections Management Software | Emagia

6. Reconciliation & revenue recognition: As soon as you deliver your product or service, you can begin to recognize revenue.

Note: These processes are highly dependent on each other, meaning that if a bottleneck arises in one step, others can be negatively impacted.

With this refresher in mind, let’s explore the extent to which automation can transform your O2C cycle by walking through 4 levels.

Related: 3 common sales order automations

Level 0: Minimal integrations and no automations

At this stage, most of your processes run manually.

Your employees are forced to carefully review and make sense of contracts, notes in apps, relevant emails, etc. and then work to ensure that all of this information is accounted for in their ERP system. Only then, they’re ready to bill customers and perform revenue recognition (both of which are also performed manually).

This level calls for inefficient activities from employees, such as app hopping and data entry, which not only wastes their time but also leaves them prone to making significant errors. Moreover, for the few integrations you’ve managed to build, they’re likely point-to-point. This means your engineering team has to play a big role in implementing and maintaining them via custom code.

Level 1: Simple tasks are automated

Now you’re starting to integrate systems with an integration platform as a service (iPaaS) in order to keep data in sync. This eliminates employees’ need to perform extensive app hopping and data entry—but there’s still issues to contend with. Namely, many of your processes still lack automation.

For instance, your team might need to manually enrich a product record in the ERP system as additional data is required to bill from the system or perform revenue recognition; in addition, your finance team might be communicating with sales or with customers, via email or phone, to discuss topics like billing status.

(Video) How automation and data analytics can elevate supply chain performance

Related: A guide to integrating with your ERP system

Level 2: Process and data flows are automated

This level invites a wealth of automation use cases, where process flows—like making approvals, providing alerts, and sending reminders—are now streamlined, and data sets across various source systems are being transformed, enriched, aligned, and validated.

Below, we’ll break down how the latter can work in the context of an e-commerce business that uses a self-service model. We’ll also assume that the business’ source systems employ a diversity of data models, each with its own level of complexity.

Using an integration-led automation platform, you gather the data from each source system—this includes the data from your app store, payment providers, and subscription system. All of this data is then added into a data warehouse, like Snowflake, where the integration-led automation platform transforms it into a single, common data model.

The data is then aggregated and recorded into your ERP system, which can take the form of journal entries, orders, invoices, etc. The goal behind this is to automate both billing transactions and revenue recognition.

Finally, you’re then able to use the integration-led automation platform to reconcile the sales to cash.

Level 3: Decision making is automated

In addition to moving data and streamlining workflows, this level lets you proactively manage the entire process. This includes using advanced technologies, like AI, machine learning, and natural language processing, to provide proactive alerting and insights to key metrics.

Let’s take a closer look at how this can work in practice:

Using an integration-led automation platform, you connect your CRM and ERP and then build automated workflows around approvals, project creation, and revenue recognition. In addition, data is synced between both systems and is moving through to the apps your employees are already working in—such as a business communications platform, like Slack. Within the business communications platform, your employees can also access the data and actions from your CRM or ERP, allowing them to work more efficiently.

Moreover, your data analytics systems store the order to cash data and—leveraging an integration-led automation platform—can start triggering actions based on the events that take place. Here are just a few examples:

(Video) How an integrated Order to Cash platform can transform Customer relationship

  • When a sales is made to a customer with a bad credit history, a credit approval step gets added in real time before the deal can move to closed won
  • When a payment isn’t received by its due date, an automated notification goes out to either the sales person or the customer (or both)
  • When discounts rise above expected ranges, sales or finance leaders get alerted in real time and can take action
  • When a sales rep is managing a prospect at a certain stage in the sales cycle, they can receive a pricing recommendation that helps them close the sale

Related: 3 order automations worth implementing

Final thoughts

Before investing in initiatives that can move your business up these levels, take the time to assess where your O2C process currently stands.

This requires finding the answers to questions like:

  • What percentage of my use cases are integrated?
  • What percentage of my workflows are automated?
  • Is technology a key component of ensuring we have good data?
  • Do we have accessible and dynamic data that provides proactive insights?

With these answers on hand, you can set the appropriate goals for maturing your order to cash process and work towards meeting them.

You can learn more about each level of automation maturity by watching our presentation at this year’s Biz Systems Magic conference.

About Connor Group

Connor Group is a specialized professional services firm of Big 4 alumni and industry executives. Our team of highly experienced professionals helps financial executives with their most complex and significant matters, including financial accounting and operations, IPO and M&A services, digital solutions, and managed services. Our clients are the world’s top growth companies and we support them as they change the world and create new markets!

Our client portfolio includes multi-billion-dollar public, mid-cap public, and pre-IPO companies ranging from early stage to late stage. Our global clients represent the most exciting industries including high tech, Internet, social networking, gaming, software, ad tech, cleantech, life sciences, financial services, consumer products, biotech, services, and manufacturing.

Our goal at Connor Group is to be the most respected firm across our service lines by delivering the highest quality services to our clients. We are hired by finance and accounting executives who understand the importance of leveraging their time as well as having a partner that can successfully execute their needs.


What is an order to cash process? ›

The order-to-cash process encompasses all steps from when a customer order is placed up until the business is paid (the cash). Those steps include order management and order fulfillment, through to credit management, then invoicing and ultimately payment collection.

What is O2C automation? ›

What is Order-to-Cash Automation Software? O2C automation software speeds the order-to-cash cycle with the help of Artificial Intelligence (AI) and Robotic Process Automation (RPA) to facilitate in faster turnover of accounts receivable.

How can order to cash process be improved? ›

What are good way to improve the order to cash process flow?
  1. Automation.
  2. Standardized O2C processes.
  3. Keep Customer Service In-House.
  4. Avoid Tacking on Fees.
  5. Accurate Customer Data.

What is order to cash process in SAP? ›

What Is SAP Order-to-Cash? Order-to-Cash is an integration point between Finance (FI) and Sales (SD). It is also known as OTC or O2C in short form. It is a business process that involves sales order from customers to delivery and invoice. It comprises SO, Delivery, Post Goods Issue (PGI) and billing to customers.

What is order to cash example? ›

Order to cash in ERP software

Examples are Microsoft Dynamics 365, Oracle Cloud ERP, Oracle NetSuite, SAP ERP SD, SAP Business ByDesign or Workday. Typical sub-processes and variants in those ERP systems are: Customer master data entry. Lead management, opportunity management and quotation management.

Why is O2C important? ›

Why is the order to cash cycle important? Implementing a comprehensive order to cash process is crucial to completing customer orders within established deadline time frames. A well-established order to cash cycle can help reduce production costs while simultaneously increasing productivity.

What is an order to cash specialist? ›

Order to cash (OTC or O2C) is a set of business processes that involve receiving and fulfilling customer requests for goods or services. It is a top-level, or context-level, term used by management to describe the finance-related component of customer sales.

What is cash application? ›

Cash application is the process of matching a payment from a customer to the corresponding invoice being paid in the seller's accounts receivable ledger. It is an essential part of accounts receivable management.

Who are high radius competitors? ›

Competitors and Alternatives to HighRadius Integrated Receivables
  • Esker Accounts Receivable.
  • Sidetrade Augmented Cash.

What is the order management process? ›

Order management is the process of order capturing, tracking, and fulfilling customer orders. The order management process begins when an order is placed and ends when the customer receives their package.

What are the challenges of an order to cash process? ›

7 order-to-cash challenges
  • Inefficient payment methods #1. We're talking about paperwork. ...
  • Manual work #2. Much of the invoicing done during order-to-cash involves plenty of menial data entry and physical paperwork. ...
  • Slow speed #3. ...
  • Overhead fees #4. ...
  • Payment lead time #5. ...
  • Security concerns #6. ...
  • Lack of data analytics #7.
Jun 1, 2022

What is the order to payment cycle? ›

Buyers may wish to be able to pay quickly in order to take advantage of any early payment discounts available. This process is known as the order-to-pay cycle. For suppliers, the quicker the invoice can be processed the faster they can be paid for providing their product or service.

What does O2C stand for? ›

Step by Step: What you Should Know About the Order-to-Cash Process. By Danny Wong. The order-to-cash (O2C) process is a defining part of a company's success, and it also plays a big role in driving an organization's relationship with the customer.

What SAP modules are in order-to-cash? ›

There are four main stages of SAP order to cash process: pre-sales activities, order processing, shipping, and billing. Pre-sales activities take place before an actual sale deal has taken place.

What is SAP sales order? ›

A Sales order is a request made by a customer to the company for delivery of some defined quantity of goods or a service in a specific time period.

What is O2C cycle in interview? ›

Steps in the O2C Process
  1. Step One: Customer Places an Order. ...
  2. Step Two: Order is Fulfilled. ...
  3. Step Three: Order is Shipped. ...
  4. Step Three: Invoice Created and Sent to Customer. ...
  5. Step Four: Customer Pays Invoice. ...
  6. Step Five: Payment is Recorded in General Ledger.

What is O2C process in Genpact? ›

Genpact Hiring For Order To Cash|| Process Associate

Making collection calls to the customers, emailing/faxing invoices or getting hard copies mailed out to customers as per their requests. Identify and rectify unidentified cash and manage end to end process of Cash applications.

What does an order to cash manager do? ›

Responsible for minimizing portfolio delinquency, collections, and write-offs. Monitor aging of Accounts Receivables to identify past due accounts. Collect A/R through various methods such as phone calls, sending out statements and liaison through sales.

Who are the stakeholders in O2C? ›

An individual or organization who has any form of interest(usually financial) invested in the company.

What is order to cash procure to pay? ›

Generally speaking, the process a business undertakes when making purchases from suppliers is often referred to as “Procure to Pay,” or P2P. The flip side of the coin, the process of receiving payment for goods or services rendered, is called “Order to Cash,” or O2C.

What are elements of cash application? ›

There are three elements of cash application: Invoice, Payment, and Remittance Advice.

How do you apply a cash application in SAP? ›

For an open bank statement item, SAP Cash Application suggests a corresponding open invoice as a match. The user is given brief information on the reason for the selection. The user then has the choice of accepting or rejecting the proposed match. If the match is accepted, the software automatically applies the cash.

Is high radius a SaaS company? ›

HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company that leverages Artificial Intelligence-based Autonomous Systems to help companies automate Accounts Receivable and Treasury processes.

Is high radius a good company? ›

HighRadius has an overall rating of 3.9 out of 5, based on over 1,959 reviews left anonymously by employees. 79% of employees would recommend working at HighRadius to a friend and 74% have a positive outlook for the business. This rating has improved by 3% over the last 12 months.

Is high radius profitable? ›

Its ARR has been growing by about 70-75 percent year-over-year, Narahari said. The company was profitable and still “mostly” is but is in “growth” mode so profitability is less of an immediate objective.

What are the steps of the cash to cash cycle? ›

CCC traces the lifecycle of cash used for business activity. It follows the cash as it's first converted into inventory and accounts payable, then into expenses for product or service development, through to sales and accounts receivable, and then back into cash in hand.

Is order-to-cash and accounts receivable same? ›

In finance, accounts receivable or order to cash is a necessary process that influences the company's revenue growth and customer relationships—improving an organization's order to cash process steadily affects the company's business growth and revenue.

What are SAP processes? ›

What is SAP Process Orchestration? SAP Process Orchestration software supports custom process applications and integration scenarios. As the process orchestration layer of SAP's Business Technology Platform, it can help you improve process efficiencies and respond to changing demands.

What is OTC and p2p in SAP? ›

OTC : Order to Cash. PTP : Procure to Pay.

What is O2C cycle in interview? ›

Essentially, the O2C or OTC process is the entire order processing system. Also called the O2C cycle, it is how your business receives, processes, manages, and completes orders. It begins from the time an order takes place and includes each step of the delivery and payment process.

What is the difference between P2P and O2C? ›

Generally speaking, the process a business undertakes when making purchases from suppliers is often referred to as “Procure to Pay,” or P2P. The flip side of the coin, the process of receiving payment for goods or services rendered, is called “Order to Cash,” or O2C.

What is order to cash process in Genpact? ›

Genpact Hiring For Order To Cash|| Process Associate

Making collection calls to the customers, emailing/faxing invoices or getting hard copies mailed out to customers as per their requests. Identify and rectify unidentified cash and manage end to end process of Cash applications.

What is cash application in O2C? ›

What is Cash Application? In an Accounts Receivable world, Cash application is when incoming payments from customers are matched with their respective open invoices. The purpose of cash application process is to close all such invoices in the ERP for which the customer has paid.

Optimizing the order to cash process will eliminate inefficiencies and can result in more working capital, fewer bottlenecks, and a higher rate of customer satisfaction. It can also reduce fulfillment time.

There are many reasons why a business needs to optimize its order processing system.. Accounts receivable and the invoicing system during O2C determine a company’s cash inflows.. Order Management Credit Management Fulfillment Shipping Invoicing Accounts Receivable (AR) Payment Collections Data Management and Reporting. Order management is the first step in the order to cash process and it starts the second a customer places an order.. Automating the credit management process makes it easier for accounts receivable.. Order specifics Costs Credit and payment terms Order and shipping date Customer data Data. The digitization of invoicing and data management also helps to move the process along more efficiently.. Successful optimization and management of the order to cash process helps a company consistently deliver value to their customers and receive payments on time.

Streamlining the Order to Cash Process through Workflow Automation Businesses of all sizes and types need to adopt cost-effective measures as an integral part of the core business strategy. Managing business expenses efficiently is one of the best ways to save costs. The order to cash process (o2c) directly impacts the revenue generation

What is the order to cash cycle?. The OTC cycle comprises a set of business processes that involve receiving and fulfilling customer requests for goods and services.. Accounts receivable: a poor o2c process affects the accounts receivable function by delaying the time invoices are collected.. The OTC cycle is affected by several business processes.. The sales orders, invoices, inventory, and logistics functions affect the OTC cycle.. Processing sales orders is the first step in the order to cash process.. Such defaulted payments affect OTC collections and customer service departments.. Inaccurate sales orders due to manual entries Inaccurate invoice entries in manual processes Dissatisfied customers that default on payments Delayed payment collection Security of data

In this blog, we’re providing a complete overview of the order-to-cash cycle. Click here to check out our in-depth guide!

Increasingly, businesses have come to lean on technology to manage their ordering cycle, with software like ERP (Enterprise Resource Planning) making it easy to automate processes and unify interfaces to ensure a positive customer experience.. Here, seamless integration with fulfilment and order management processes is critical, ensuring that the right items find their way to the correct customers in a timely fashion.. As such, it’s critical that you seek to find efficiencies throughout your O2C – ensuring that customers enjoy a fast and efficient service after placing their order, whether you operate on or offline.. Integrate your systems – the most powerful way to optimise your order-to-cash cycle is by integrating every system and process within the sales and ordering infrastructure; this includes ordering, fulfilment, inventory, accounts and customer data management.. Aside from ERP software, consider investing in technology to support each process within the order chain, whether that’s specific inventory management tools, courier system integration, a warehouse management solution or EDI integration.

We'll share automations that sync customers across apps, update inventory counts, and provide sales orders to the appropriate employees.

Your order processing workflow can take various forms, depending on the types of products you offer, the maturity of your business, the apps you use, the locations of your clients, and so on.. Sync customers between your CRM and your ERP system Once a sales rep closes a deal, they’ll want to move as quickly as possible in processing the client’s order.. If the client already exists, their account in your ERP system gets updated; if they don’t, they get added as a customer.. Once a sales order is added in your ERP system, the workflow gets triggered.. To streamline inventory updates, you can integrate your ERP system with the apps that display products and inventory counts both internally and externally—such as your CRM and an e-commerce platform like Shopify .. From there, you can implement automations where once the inventory for an item changes in your ERP system, that change gets accounted for automatically across your connected systems.. Make fewer mistakes Performing data entry, whether it’s manually updating inventory counts or it’s updating customer information across your apps, leaves your team prone to errors.. For example, the wrong customer can receive a product or service; or a customer can receive a product or service that’s different than what they purchased.. Improve the employee experience The data entry and app hopping involved in processing orders manually doesn’t just leave your team susceptible to errors—it also disengages and dissatisfies them.. As a result , your employees are more likely to be less productive and leave your organization sooner.. Since automation can by and large remove these manual tasks, your organization can avoid the negative experiences they bring to you and your colleagues.. With automated order processing working to expedite your order fulfillment process, your team can meet this customer demand effectively and—as a result—strengthen customer relationships.

Process Automation for Fintech: Considering fintech's unique business requirements & identifying an agile, serverless solution for efficiency, CX, and ROI.

As fintech companies evaluate integration and automation platforms to manage their SaaS applications, databases, and microservices, they should look for the following criteria:. You can connect to an RPA’s API to incorporate it into automated workflows, using cloud-based enterprise automation.. Enterprise automation is cloud-native and uses API connections to offer enterprise application integration , data automation, and workflow automation between SaaS apps, databases and microservices.. The value of automation for fintech:. Reduce fraud Reduce internal operating costs Increase internal operational efficiency Reduce human error Faster loan and credit approval processes Process data in real-time. With automation.. Automation for the fintech and digital payment enablement sector isn’t just about streamlining internal processes like employee onboarding or syncing data between applications- it shapes the customer experience and plays a big role in which companies customers are going to turn to for their credit needs.

Discover how the definition of workflow automation has evolved, and learn how you can apply it to critical employee and customer processes.

Workflow automation is a type of automation that streamlines a business process end-to-end.. New hires may not receive provisions to the right set of apps Employees may keep their access to your organization’s devices and apps once they leave Inbound leads can be assigned to the wrong sales rep, preventing the lead from receiving a timely response Incidents that negatively impact the customer or employee may fall through the cracks. The individual tasks that should be automated and the apps that’ll perform those automations The business logic you should apply throughout your workflow How frequently the workflow automation should occur (e.g. real time vs once per week) How to respond when specific errors occur with your data or your apps. Your workflow automation software can—and should—address this by using platform chatbots that can interact between your business comms platform and the rest of your apps.. Only then, your employees can work in their apps and automate their workflows without leaving your business comms platform.. It needs to provide pre-built automations and connectors To help you and your team brainstorm and implement integrations and automations quickly, your workflow automation tool should provide pre-built connectors with popular apps and automation templates across a range of processes.

We'll cover 3 specific procurement automations as well as the top 5 benefits that come with automating your procurement processes.

No matter the apps or equipment your employees need, you can satisfy any request quickly, completely, and easily by automating your organization’s procurement process.. It’s the use of automation to streamline various parts of your procurement process, from creating and approving a purchase order to processing an invoice.. Fast-track your purchase requisition workflow Once an employee realizes that they have a specific need, they can make their request in a chatbot that operates within your business communications platform (e.g.. An employee accesses the chatbot in their business communications platform, and selects the specific equipment they need.. This means that when an invoice arrives in the latter, it should also get added to the ERP system in real time to ensure your colleagues find it quickly and pay it off on time.. So why should your organization automate its procurement processes?. It improves the employee experience No matter where in the procurement process you look, automation can help your employees save time and focus on more thoughtful tasks.. They can, instead, find everything in the apps they’re already using, whether it’s your business communications platform or your ERP system.. It improves your relationships with vendors The vendors you work with often play a critical role in the success of your employees, and in the organization at large.. As one of our earlier examples shows, procurement automation helps ensure that your colleagues in finance make timely payments by instantly creating the invoice in the platform they’re already working on.. The integration-led automation platform also offers Workbot , an enterprise chatbot that allows your employees to automate procurement-related workflows while working within your business communications platform.

We'll cover 5 automations that can help you send more accurate invoices and collect payments by the full amount, faster.

To hold clients accountable and to empower them to pay off each invoice on time and by the full amount, you can perform a variety of automations around your invoicing process.. Download whitepaper Automated invoicing is the use of automation to streamline any process in your invoicing workflow.. Provide refunds with ease If, for whatever reason, your team needs to provide a refund for a client, you can fast-track the process and make it easy on your support team by integrating your billing platform with the app your reps use to manage clients (e.g. Jira ).. Invoice automation can help ensure that data is kept in sync across these teams’ apps over time—allowing for better alignment and collaboration, as well as less unnecessary work, such as entering invoice data that already exists in another app.. Learn how your team can use the platform and discover how Workbot , Workato’s enterprise chatbot, can also help automate your team’s invoicing workflows by scheduling a demo with one of our automation experts.

Learn about the 4 workflows involved in automating the process end-to-end, and discover the benefits this automation brings to your organization.

This type of finance automation not only benefits the employees who submit the requests, but it also helps your team manage each and every request with little work and complete accuracy.. We’ll walk you through how procure-to-pay works, where automation can improve the process, and the benefits from leveraging automation.. These include p2p automation, purchase-to-pay automation, and procure-to-pay process automation.. It’s the use of automation to streamline your procure-to-pay process from beginning (purchase requisition) to end (paying off invoice).. To implement procure-to-pay automation, you’ll need a platform that can connect all of the relevant applications, and use triggers (or business events) that lead to actions (or real-time business outcomes).. Note: You can only build these workflows once you’ve used an enterprise automation platform to connect the relevant systems, such as your ERP, the supplier’s ERP, and your spend management tool.. You can get ahead of this by connecting your HRIS with your procurement tool and then implementing the following workflow: Once the new hire is marked as hired in your HRIS, purchase orders get created on their behalf—which includes the predetermined equipment that’s based on their role.. To ensure that each PO gets reviewed and approved quickly, you can sync your business comms platform with your procurement tool and implement a workflow automation that works as follows: Once a PO isn’t approved by a specific employee for a given length of time, they’ll receive a direct message in the business communications platform that reminds them to review it.. Once you and your team are set on automating your p2p process, the next question involves deciding which tool you use to implement the automations.. Being able to access pre-built connectors and automations can help your team implement integrations and automations faster and more easily.. Though your employees in IT may end up implementing and maintaining the integrations and automations, employees in accounts payable likely want to play a role in its execution.

We'll cover what automation accelerators are, the benefits they provide, and the first 6 that we're rolling out.

Automation can be a complex endeavor for any business.. Over the years, we have helped thousands of companies start their automation journey from scratch.. That has led to amazing things like the Workato community and recipe collections which have powered thousands of automations over the years.. As I have supported customers across industries, it became clear that it was time to take pre-packaged automation solutions to the next level.. During Automate 2021, I am thrilled to announce Workato Automation Accelerators.. You’ll spend less time “figuring out” and more time improving.. As you’ll see, these accelerators aren’t just designed for one problem, they often can be used for multiple use-cases across your lines of business.. With this foundation, you can set up automated retries for recipes if something goes wrong.. It easily applies to any given Workato recipe as an error handler, and with simple configurations you can set up who should be notified and when, as well as where the incident should be logged, whether it be Splunk , Zendesk , or any other platform you may be using.. A standard way to manage frequently used records, whether that be employee data, customer data, product data and more.. While today we are announcing six Accelerators, over time we will be building a full library covering platform level accelerators, accelerators for specific business areas, and even industry specific use-cases.

What is the Order-to-Cash process (O2C) - and ways to improve this. Steps in the process, how to optimize through automation and achieve consistency for business success.

By automating the entire accounts receivable process , from credit management to invoicing and payment reconciliation, businesses can optimize every step of the O2C process for improved cash flow by bringing money into your organization faster.. Those steps include order management and order fulfillment, through to credit management, then invoicing and ultimately payment collection.. By shortening the time from purchase to order and invoice delivery, as well as simplifying the payment process, cash flows more readily.. Revenue generation ─ a streamlined purchase and fulfilment process, swift, accurate invoicing, and ease of payment improve customer satisfaction and encourage repeat purchasing as well as customer advocacy.. Customer experience ─ customer relationships can be won or lost on the experience of order fulfillment, invoicing, and payments.. However, invoicing automation needs to take into account a large number of nuances and variables, including invoice format, delivery mechanism and media, recipient, approval process, associated documentation and many other factors.. The process for customer payments should be made clear at the time of purchase and in the invoice (or accompanying documentation).. The invoicing system needs to accept a trigger to create an invoice when orders are fulfilled, the system then pulls in data about the order, checking the customer’s credit limits and agreed payment terms, before generating and delivering an invoice to the correct contact.. The payment collections process then needs to link back to the purchase ledger to ensure payments are reconciled against the correct order.. Improved Cash Flow : Automation doesn’t just save process time, it prevents bottlenecks in invoice delivery, payment processing, and reconciliation.. Improve Customer Experience : Customer relationships benefit from the improvements automation bring to process consistency, fulfilment reliability, brand perception and ease of payment.. Payment collection: A range of payment options, ideally linked directly from the invoice and with a consistent payment process consistent, reduces problems that may delay cash flow.. Late payment reminders: A consistent approach to reminding customers that their invoice is due for payment (perhaps two weeks ahead of the payment deadline), and then sending reminders/dunnings at set timeframes for late payments, will help cash inflow and minimise payment delays.. Get in touch directly to find out how we can help optimize your cash cycle through automation of order to cash processes.

While many companies focus the bulk of their resources on the period up until the customer places an order, optimizing the order-to-cash (O2C) process can yield remarkable benefits that ripple throughout a business

You can streamline your O2C process from beginning to end to serve customers faster and more effectively, minimize errors and delays, and ensure performance data has maximum impact on the company.. Order-to-cash is the entirety of a company’s order processing system .. While some may think the O2C process is complete when the order is received and paid for, there are other important steps that occur after these actions.. To manage the process well, you need to excel at every function of business, including sales, manufacturing, technology management, fulfillment, shipping, and accounting.. The first step of the O2C process is order management, and it begins as soon as the customer places an order.. Data from the order and fulfillment management functions must be immediately updated for the shipping team so they can plan shipments around carrier pickup schedules and get orders to customers on time.. As is the case with anything related to credit management and accounts receivable, invoicing delays and inaccuracies can snowball and lead to cash problems that disrupt the entire organization.. Automated accounting systems need to flag outstanding invoices at pre-set times before they are overdue, and accounts receivable representatives should review these invoices to determine if there are any obvious errors that would result in delayed payment.. Organizations encounter issues when payments delivered by customers have not been processed in the ordering system and accounts still show as unpaid.. When they try to place another order, the automated system should alert the customer that payment needs to be sent before they can complete their next purchase.

Discover how to optimize your order to cash process to improve your bottom line and delight more customers.

Once complete, the order continues processing or working its way through the order to cash cycle (O2C) — also known as the order to cash process — while I go about my daily activities.. The order to cash cycle, often abbreviated to O2C or OTC, is how your business receives, processes, manages, and completes customer orders.. The order to cash cycle is a critical part of how your business functions — it impacts your revenue, interactions with your customers, customer retention rates, and overall growth.. Streamline the buying process for your customers Reduce order-to-fulfillment time for your customers Minimize the need for customer support rep intervention Fulfill orders accurately the first time they’re placed Fulfill orders in a timely fashion for customers Ensure a quick conversion of receivables and collections for customers Avoid order and form information re-entry Prove to customers your business is professional and you value their time Avoid backorders and make sure you have enough product Improve your data reporting and accuracy of records over time. Receive Order Depending on your OMS, specific people, teams, and systems will be notified about an order as soon as it’s submitted by a customer.. Manage Customer Payment Next, manage your customer’s payment based on the method they chose to use (e.g. credit, debit, PayPal).. Your ecommerce system will help you manage this part of the process as well — when the customer places the order, the system will automatically send the payment through an approval process.. Note : Typically, new customers will go through the payment approval or denial process while returning customers will move straight to fulfillment because their data is already stored in the system.. Fulfill Order Next, it’s time to fulfill the order — meaning, locate and prepare the item for the customer who purchased it.. Inventory management systems help you fulfill orders accurately for customers as well as keep track of your inventory records and data.. Ship Order to Customer Ship the order to your customer in a timely fashion so they receive it by the date you promised.. Invoicing software will help you with this step — a system, such as QuickBooks , might be included in your order management software depending on which one you have ( Shopify , for example, comes with its own invoicing system ).. Assuming everything goes accordingly, this step of the cycle should be automated by your order management and invoicing systems — meaning, the customer’s form of payment should automatically process as stated on the invoice.. Your automated order and invoicing systems make this simple because they already manage all data about your sales, orders, and customers.

We wanted to summarise some of the best practice and priorities as we emerge from the pandemic and strive for more resilient and efficient business growth.

The last two years have seen plenty of transformation across business processes, order-to-cash (O2C) included.. In-house automation initiatives often result in IT resources tied up for months (or worse) and lack to nuance and control of the manual processes they replace, so best practice is to involve an automation partner to outsource the complexity and shorten time to value, with minimal disruption to this critical business process.. With the supply chain crisis affecting global business, profitability down and cash flow stretched further than ever, businesses are looking for ways to optimise cash flow and extract cash tied up in working capital.. At Corcentric, we have seen a massive increase in clients opting for our Managed Accounts Receivable (MAR) solution which provides the advantages of a non-recourse invoice financing solution with a full-managed service to provide e-invoicing presentment and payment (EIPP) as a white glove extension of their own order-to-cash process.. With paper invoices reaching empty offices, electronic invoicing was the only sure fire way to get invoices through and preserve cash flow, but 2022 should be the year these businesses reflect on the shortcomings of their solutions and look at more nuanced, secure and effective EIPP solutions instead.. With order-to-cash as a shared service, many businesses have found managed service solutions the most effective way to rapidly deploy process improvements – outsourcing the development and deployment challenges, whilst maintaining direction and control of the process management.. New technologies and the transformation of business processes can sometimes spiral in complexity, but it is normally businesses with the simplest processes who come out on top (and are preferable to work with).. Connect pricing, discounts and rebates with invoicing processes, simplify cash application and automate all the nuances which support your dedication to customer service excellence, but leave this complexity to underlying service layer – every touchpoint and overall management of the O2C process should be as simple as possible.. Every customer touchpoint across the O2C process, from ordering, to order processing, to receipt of goods and invoice and then payment, or even dispute resolution, is an opportunity to elevate the customer experience .. The task is handed off to the O2C process owner in order to meet KPIs around cash flow, access to working capital, forecasting or profitability through improved process efficiency.


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