Order-to-Cash Optimization For Stronger Financials

Finance leaders around the world agree that the only way to improve working capital and profitability, while eliminating redundancies and write offs, is by optimizing the order-to-cash (O2C) process.

In optimizing the order-to-cash process, those critical activities bridging the customer-business relationship from receiving to fulfilling customer requests for goods or services, a company has the opportunity to establish a more strategic approach to those activities. This can take the form of automation or more formally standardizing processes to help reduce costs and time needed while improving data access and visibility. By optimizing this valuable chain of interconnected activities, a company can benefit from improved departmental coordination, higher performance and increased customer communication and satisfaction.

Managing customer orders and turning them into revenue for the organization involves broadly the following stages:

• Sales order processing
• Invoicing
• Credit management
• Cash allocation

Each of these pose diverse challenges that organizations need to navigate through. However fundamental to the finance function, this order-to-cash process has traditionally been a laborious, manpower intensive and error-prone effort. Thankfully, modern monetization platforms offer a significant opportunity for O2C process improvement and automation that help organizations embark on their digital transformation journey.

This blog shares insights into how by optimizing the O2C process, finance leaders globally are able to dramatically impact speed, profitability and proficiency across the finance operation. Some common benefits include, cost reduction, increased cash flow, reduced days sales outstanding (DSO) and numerous other improved performance indicators. Customer retention and revenue stability are other areas that see improved benefits. Businesses are able to exceed customer expectations and minimize attrition because of faster processing of orders, electronically generated and accurate invoices and a stronger focus on customer service.

Automating the O2C process seamlessly connects the dots between orders placed, invoicing, payments made by the customer and third-party payment allocation. Payments from various transaction mediums are updated in the general ledger automatically, which in turn reduces cost and time by eliminating errors and manual entries, resulting in an optimized order-to-cash and streamlined partner-to-pay process.

Key Benefits of Order-to-Cash Optimization

• A boost in cash flow and working capital
• Data driven insights and deeper visibility of the entire finance function
• Quicker identification of unpaid invoices
• Significant time and cost savings while eliminating redundancies
• Enhanced focus on credit management and growth strategies
• Powerful analytics and improved ROI
• Facilitates accurate revenue recognition and seamless partner payments

Optimizing Partner Payments with a Modern Monetization Platform

Recent studies have highlighted that there is a huge gap in the way businesses measure the effectiveness of their business partners. Ambiguity in areas like contract compliance and determining partner compensation are complex challenges organizations navigate through. As a business scales, volume of invoices and payment obligations on the accounts payable (AP) side, only surge. The complexity compounds as those partnerships expand across borders and adds to the challenge of managing multi-currency transactions.

The global disruptions and economic downturn caused by the pandemic crisis has multiplied the challenges businesses face collaborating with partners. In this upheaval, financial transformation alone can enable standardized and secure processes to ensure efficacy of the payments process and streamlined applications. 

In today’s dynamic and unpredictable times, organizations are navigating through stiff challenges such as, assessing ROI on partnerships, managing partner contracts, generating performance reports, and meeting compliance requirements. The absence of automation in the finance process can hold back an organization from expanding their partnership programs, which can significantly impact revenue streams.

By embracing automation, organizations gain deeper visibility into the effectiveness of partners’ performance and put in place initiatives that support partner loyalty. Automation also minimizes the risks of cyber-attacks and security fraud. Cybercrime continues to be on the rise within the B2B ecosystem as phishing, data theft, wire transfer and other frauds creep into the B2B landscape. Automation can minimize the possibility of errors and inaccuracies by ensuring compliance with partnership contracts, thereby accurately assessing partner performance and optimizing partner payments. A modern monetization platform can play a critical role in boosting the efficacy of key pillars, i.e. PRM (partner relationship management) and CRM (customer relationship management) systems, while complimenting the digital transformation journey of the organization.

No wonder, finance leaders around the world agree that O2C automation, if implemented properly, can improve the efficiency of the order-to-cash process immensely. Not only does it deliver back-end efficiencies, but it also helps strengthen relationships both with customers and partners, ultimately impacting the bottom-line.

While, embarking on a financial and digital transformation journey, it is essential for any business looking to grow and stay ahead of the competition, to partner with the right monetization platform. By adopting a platform like RecVue, during a digital transformation initiative, it can be a game-changer in terms of leveraging technology and automation to deliver performance optimization as well as time and cost savings. RecVue’s unified platform integrates with any ERP, CRM 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.

Reach out to us today for an O2C assessment and to learn more about RecVue’s partner compensation management capabilities. Get empowered to deliver on your organization’s digital transformation goals and make your business future proof.