Decoding the Order to Cash Process Puzzle and Finding a Definitive Solution

Various factors fuel a company’s success story, and one often ignored hero is the finance and accounting function, especially the efficiency displayed by this department. Within this department, if you want to zero in on a process that has a huge role to play in fueling a company’s growth, look no further than the order-to-cash process. You don’t want a properly functioning order to cash or O2C process; you need to ensure a process that delivers optimal functionality. This is important because it helps set the stage for healthier and enriching customer relationships, improve financial planning, and streamlining cash flow management.

So, how do you make order to cash better? How do you crack the O2C puzzle and ensure you have all the pieces in place?

Let’s take a look:

• Identify the Missing Pieces

You must determine what is wrong before you decide how to optimize your O2C process. What are its limitations? What are its weaknesses? The answers to these questions will help you strategize the best practices you want to implement within this process. The challenges can include an inability to streamline and standardize the cycle or even a difficulty in scaling the O2C team that becomes the root cause for being unable to meet various essential deadlines, thus impacting the ROI from the O2C cycle. Another problem could be a lack of leadership buy-in for improving the order-to-cash process from the people, function, and platform perspective. The whole idea behind trying to audit the process and identify the gaps is to ensure that you can plug them before they become detrimental to your business growth.

• Solving the People Element

Do you want to know about that one problem that hits all companies hard with respect to their accounting department? It is ‘people’. Finding the right people to perform critical accounting tasks has become a challenge, and companies face a two-fold problem. There is a shortage of skilled accountants in the UK, and the accounting domain is experiencing a high turnover rate. It’s a double whammy, and as can be imagined, it is impacting the functioning of the finance and accounting departments when it comes to efficiency and productivity. The need of the hour is to find an answer to your staffing needs, a critical piece in the puzzle. Yes, you might not be looking for accounting professionals now, but what happens when you do? Do you have a plan in place to look for them? And how sure are you that you will find the accounting talent you need, quickly?

• Planning for Growth

An end-to-end order-to-cash process must be aligned with business growth objectives. Let’s look at a scenario wherein a business wants to expand in new geographies. Very soon, you will find orders coming your way from these geographies. Do you have your order management teams in place? What about credit management? Do you have enough capacity to manage customer invoicing? The O2C cycle needs to be highly growth-oriented, especially if you are a forward-looking business, and must be built to scale. But this scalability needs to be infused with flexibility. A team of accountants must be available on demand as and when you need them. More importantly, it must protect your accounting departments against the vagaries of the job market, economic pulls and pressures, and cost optimization challenges. Growth does come at a cost, but this cost must be manageable.

• Standardization for Optimizing Order-to-Cash Process

At its fundamental level, standardization refers to performing tasks in a clearly defined and planned manner within a specific timeframe. Standardization, these days, can have an automation component that automates repetitive tasks. Take, for example, the case of invoicing, which depends on getting the most accurate and timely information from the personnel in charge of the front-line functions. A set process that helps convey the correct information at the right time is crucial for proper invoicing, positively impacting the order-to-cash cycle. If there is any problem with information sharing, you have a faulty invoice process. This is why standardization is a critical cog in the O2C wheel.

RELATED BLOG: Optimize Your O2C Process with These 7 Best Practices

Is Order to Cash Process Outsourcing the Answer?

So, what is the solution to the O2C puzzle? Is there a single answer that helps you plug all the weaknesses in this process? The answer is yes, and it can be found in outsourcing; let’s take a look at how outsourcing can help solve the O2C puzzle:

• Scale Quickly with the Right Talent: We talked about solving your staffing challenges, and outsourcing helps you do that and more. You can get access to a team of exceptionally well-qualified accountants with wide-ranging experience in satisfying the O2C needs of businesses across domains, irrespective of size, scale, or scope. Don’t worry about attrition rates or skill shortages. Just implement your growth strategies, and an extended team of accountants is ready to start taking care of your O2C process, when you want to scale your team.
• Tech Enablement: No doubt your company is using the latest accounting technology; the right order to cash outsourcing services providers can work with your existing EPR and accounting software. But they can do one better by helping you maximize the value of the software you are using or even help implement new or migrate to new and better software. You may ask, what about expertise or experience using the latest software? The team of outsourced accountants will be well-versed with these new technologies, and because they work as an extension of your in-house team, meaningful knowledge sharing will also occur between both internal and external teams. The outsourcing providers can also leverage next-gen technologies to drive automation in the O2C cycle.

RELATED CASE STUDY: Optimizing O2C Process for a Leading Recruitment Giant through Bank Download Automation

• Process Optimization and Standardization: A reputed provider will approach process optimization with a three-pronged approach: people, process, and platform. You work with the right talent that helps scale your team; you can implement the proper processes that focuses on quality, efficiency, and productivity with measurable performance metrics; and your accounting function also benefits from technology-led business transformation that empowers the O2C with automation and other technologies that can deliver critical financial intelligence and insights.

How to Find the Solution?

Now that you have decoded the O2C puzzle and are seriously considering outsourcing the order-to-cash process, you must search for the right outsourcing specialist. Not everyone is a good fit for your requirements because you not only need an outsourcing partner but also a trusted advisor who can help your company optimize its O2C cycle and make this process an integral growth driver.

QX can help achieve O2C transformation by delivering outsourcing services configured to drive efficiencies across all core O2C activities, including credit control, accounts receivable, customer helpdesk, billing, customer master management, and month-end closing. Get in touch with QX experts to solve the O2C puzzle.

Originally published Sep 14, 2023 10:09:28, updated Oct 04 2024

Topics: Order-to-cash cycle