Use Order-to-Cash Automation to Boost Business Performance

As we all know, the order-to-cash (O2C) process encompasses the financial and business processes that link buyers and suppliers when they work together. It starts when they connect to transact business and ends with the financial processes that close the payment obligation by receiving the dues leading to revenue recognition. Optimizing the O2C cycle could be the key the finance function needs to unlock superior customer satisfaction and improve retention rates.

Your order-to-cash process covers the financial and business activities linking your buyers and your suppliers, processes which must run efficiently and accurately for nothing less than the life and longevity of your business. Order-to-cash automation, therefore, can help your business increase productivity, reduce lead times and improve your cash flow. A more effective O2C process can ensure orders are processed faster, accounts receivable speed up and the resulting earnings can be accessed and reinvested back into your business faster as well. All working in harmony, order-to-cash automation puts your business in a better position to turn orders into revenue, which, in turn, translates to steady, sustainable growth.

Why automate the order-to-cash cycle?

Different business functions such as procurement, accounts receivable, credit control and risk management work together on the same orders, while operating and controlling their own data. Managing different systems and workflows can be challenging leading to slower processes and inaccurate data. By automating order-to-cash processes, organizations can build competitive advantage, speeding up business workflows and empowering the financial team with data-based insights and decision making.

Let’s look at some advantages of order-to-cash automation that can transform your business, while offering a single platform to manage the entire order-to-cash process.

• Faster and accurate bill and payment processing
• Accurate revenue recognition
• Unified process and communication amongst all business functions
• Elimination of unwieldy manual tasks and repetitive data entries
• Error and dispute mitigation
• Rapid decline in operational costs
• Accelerate customer billing process
• Gain control on reporting and analytics
• Boost return on investment (ROI)
• Deliver unforgettable customer experience

If implemented properly, automation has proven to improve the efficiency of the order-to-cash process. Not only does it deliver back end efficiencies, but it also helps strengthen relationships with customers and partners.

Viewed holistically, the order-to-cash process is more than a collection of business processes. This cycle can provide peerless insight into how, when and why your customers choose to conduct business with you. Data automation can have a wide-ranging impact across every step of the order-to-cash process. By automating your order-to-cash cycle, you have the opportunity to further apply these insights and improve customer satisfaction and retention rate.

Let’s look at some order-to-cash best practices that can improve business performance.

1. Optimizing the Order Management Process

If your order management process is facing challenges like wrong or mismatched deliveries to customers, order delays, and lacking inventory intelligence, it is a clear sign that there is a need to streamline this process to eliminate inefficiencies.

If your finance function is using outdated processes such as written order forms, manual data entries, an automated O2C and updated CRM will minimize manual mediation and eliminate the need for order re-entry.  The digitization of solutions over the legacy software systems will minimize complex workarounds that make the O2C process lengthy and will ensure that data relating to inventory and customers is used efficiently.

2. Invoice Automation to Decrease Errors

An ideal billing system will automatically generate an invoice and deliver it to the customer with tracking details as soon as payment is accepted. Automating invoicing helps to deliver the invoice to a customer without any manual delay, thereby initiating the payment process quicker.

3. Automating the Credit Management System

Implementing a credit management system will help to modernize the ordering process and guarantee consistency in billing. This ensures that outstanding payments are made promptly, while minimizing late payments and strengthening the customer experience. Streamlining the collection process by automating when customer statements are delivered can help achieve this goal. Implementing credit incentives and offering discounts ahead of time can help improve cash flow.

4. Reducing DSO by Automating Tracking Systems

Day Sales Outstanding (DSO) refers to how long it takes for the organization to receive payment. The longer it takes for a customer to receive an invoice, the longer it will take them to pay. An automated tracking system can help manage and track DSO. An organization can reduce the DSO rate and collect payment significantly faster by automating the process.

5. Payment Management and Maintaining a Single Point of Contact

Quotation errors, inaccuracies in billing, and transactional disputes can be minimized by eradicating manual processing. Maintaining a single point of contact for your accounts to escape miscommunication and confusion helps a great deal. Utilizing an order process to automatically apply any customer specific discounts helps mitigate quote errors. Unification of invoicing and payment data is an important step in the process too, impacting real-time reporting and analytics for improved financial forecasting.

6. Automate Revenue Reporting for Compliance

Instead of relying on manual processes to address ASC 606 and IFRS 15 compliance, many companies can benefit from implementing software to automate revenue reporting and revenue recognition. Automation will require a front-loaded investment to select a new system and implement the solution successfully.

7. Reduce Time to Market

Automation helps to increase go-to-market agility and sharpen your organization’s competitive edge by enabling you to analyze usage patterns, revenue trends, and customer behavior. It also empowers and allows creation of predictable revenue streams by delivering an outstanding customer experience.

 Other advantages include:

• Reduce manual labor and free up resources to focus on higher value-added services
• Leverage automation to enhance checks and controls to improve quality and compliance
• Decrease staffing cost
• Achieve scalability to face demanding business shifts and complex challenges

If your organization is adopting or expanding revenue streams based on recurring or usage and services-based business models, it is time for you to evaluate your order-to-cash processes.

RecVue’s unique, unified platform integrates with any CRM, ERP 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.

Let’s take a look at how some of RecVue’s customers are mastering modern and hybrid monetization:

• ACI Worldwide processes 250 million usage transactions per month and maintains 99% billing and receivables invoice accuracy
• World Wide Technology eliminated over $300K in costs annually and reduced their time to invoice by 94%

RecVue is the only order-to-cash automation platform powered by big data that is designed for high-volume recurring revenue models for the enterprise. We are also the fastest growing order-to-cash platform that helps enterprises manage their innovative business models. We are the only platform that gives companies complete control over all aspects of their recurring revenue contracts at scale, while maintaining the flexibility for monetization innovation and financial rigor for compliance. The result is increased revenue growth, faster time to market, and total visibility into all revenue streams.

Reach out to us today for an Order-to-Cash assessment and to learn how smart monetization can fuel your recurring revenue and traditional business models to support future growth.