Streamline and efficiently manage the order-to-cash process with software

Companies, which typically perform various business activities, such as manufacturing, marketing, and selling products or services, to be successful must efficiently execute their key business processes, such as Source-to-Pay, Order-to-Cash, Opportunity-to-Order, etc.  Order-to-cash (OTC or O2C) refers to a set of business processes that are associated with receiving, processing, and fulfilling of customer orders for goods / services and receiving the related payments. The O2C process is important for companies because its efficient and streamlined management plays a significant role in complying with the terms of the contract, helping build customer relationships, and the financial performance of the company. Many companies are investing in software solutions which, with their data handling and processing capabilities, help them to perform the O2C process according to the laid out procedure and in the proper sequence. 

Steps in the O2C cycle

The O2C cycle starts when a company receives a purchase order and begins to execute the various activities associated with the O2C cycle. The cycle consists of numerous steps, such as the following:

• Scrutinizing the order for correctness, customer creditworthiness, etc., and registering & acknowledging the order
• Converting the incoming customer purchase order into a sales order
• Scheduling the order for execution and initiating the fulfilment process
• Producing the ordered  goods / rendering the ordered services
• Shipping the ordered goods to the customer or rendering the ordered services
• The customer is informed of the shipment details
• Generating and sending the relevant invoice to the customer
• Processing of the invoice by the customer and making the payment
• There may also be instances of a customer having issues, such as short supply / poor quality of goods supplied / services provided. In such cases, the dispute resolution process may get triggered
• The payment for the properly-fulfilled order is received and recorded in the book of accounts

For a company to be successful it has to efficiently manage its O2C process and, as a consequence of this realization, many companies are automating the process by investing in the order-to-cash software solutions.

Reasons why companies invest in O2C software

The investment objectives driving the investments in the O2C software include

• streamlining and effectively managing the end-to-end O2C process
• cost effectively managing the O2C process
• ensuring compliance
• facilitating collaboration among the stakeholders
• enhancing the timely and accurate order fulfilment capabilities
• Improving cash flow management
• Improving the inventory management

Key features of O2C software

• O2C software automatically performs the various steps associated with the O2C process and acts as a nodal platform for managing all the associated activities
• It automatically acknowledges the incoming purchase orders, converts them into sales orders, and routes them to the concerned departments. It also  visualizes the information with the help of dashboards
• As programmed, it initiates the order-acceptance  approval process and, after its completion, communicates to the customer about the order acceptance
• As programmed, it generates necessary alerts, notifications, and reminders  about the progress of the order fulfilment process and communicates them to the stakeholders
• Generates invoices and sends them to customers and other stakeholders, such as the account receivable section, for follow up
• Acts as the central repository of all communications and data regarding the O2C process and facilitates sharing of the data with the other software solutions, such as the enterprise resource planning (ERP), customer relationship management (CRM), etc.      

By automating with the help of software solutions, companies can improve their performance across every step of the O2C cycle. Automation will assist companies to manage efficiently and cost effectively the entire O2C cycle starting from registering the incoming orders to invoicing the customers and collecting the payments. The automatic order routing feature helps streamline the business workflows, improve collaboration among the stakeholders, and timely and accurate order fulfilment, cash flow, & inventory management.

Benefits of using order to cash software

O2C software acts as a single platform to efficiently manage the entire O2C cycle and benefits the companies in numerous ways.

• Incoming orders are quickly and accurately processed for fulfilment and this results in  improving the level of service rendered and the efficiency of the O2C process
• Efficient management of the O2C cycle helps boost customer satisfaction
• Provides better visibility of the O2C process to the stakeholders and enables them to monitor its progress
• Facilitates continuous tracking of the order for fulfilment
• Automatic invoicing minimizes the time taken for realizing payments
• Improves cash flow management
• The O2C software becomes a repository of valuable data, which can be harnessed by the company to discover ways to improve the entire process.

Companies, which recognize the benefits of executing the orders received by them from their customers and receiving timely payments, are deploying software solutions to streamline and manage their end-to-end O2C process. O2C software solutions, with their data handling and data processing abilities, help companies to competently and cost effectively perform the various steps associated the O2C process; they facilitate collaboration among the stakeholders; they help better manage cash flow and inventory; they help improve the productivity of the O2C process; and help accurately meet the contractual obligations. 

About The Author: