In today’s technology-driven economy, it’s essential for businesses to prioritize customer satisfaction and timely revenue generation. The order-to-cash (O2C) cycle is a critical component behind the financial performance of a business.
Order-to-cash, or O2C, is a business process that deals with receiving and processing customer orders. Shipping, payment collection, invoice processing, and reporting on data collected are a few components of the O2C cycle.
The cash flow of an organization is dependent on various activities that take place during the order-to-cash process. Manual processing of customer orders can leave your business at a disadvantage and negatively impact both profitability and customer satisfaction. Furthermore, manually processing orders is extremely time-consuming and prone to errors. An optimized O2C cycle, alongside digitization/automation, helps to eliminate inefficiencies, reduce operating costs, and improve cash flows.
Automating the order-to-cash process offers several benefits, including eliminating inefficiencies and building a competitive advantage for your organization.
Let’s take a look at 7 benefits of automating the order-to-cash process.
1) Eliminates manual processing and improves accuracy: There’s a lot of paperwork involved in closing a sale, and more often than not, this is done manually. Manual processing can be extremely time-consuming and prone to errors. Automation will enable your ordering system to intercept orders, verify their accuracy, and enter the details into your ERP system. This will help your staff avoid the tedious task of entering and re-entering information multiple times.
Additionally, the automated ordering system can be integrated with your warehouse management system or internal software. This will provide direct access to centralized information regarding your inventory and warehouses, which reduces errors, loss of data, and potential security breaches.
2) Reduces day sales outstanding (DSO): Delayed delivery of invoices leads to payment delays. An automated tracking system can help reduce the DSO rate and speed up payment collection.
3) Improves security and compliance: Paper- and email-based accounts receivable (AR) processes have a higher risk of data breaches, phishing attacks, fraudulent invoicing, and GDPR non-compliance. An automated AR system enables your business to electronically send outbound invoices through a single provider. Furthermore, e-invoicing enables real-time electronic submission of original documents and invoice data to authorities, thereby improving compliance, legal security, and cost reduction.
4) Enhances data control: When your order processing, accounting, and warehouse management systems are integrated, you can control your data more effectively. This ensures that your data passes through fewer people.
5) Increases visibility for customers: Sales order automation offers customers access to a portal where they can place orders, check on inventory, get order updates, and check on their account status. This provides customers better control over their own accounts without seeking the support of customer service representatives for basic order-related queries.
6) Improves staff morale: Automation takes care of repetitive and time-consuming tasks like data re-entry, thereby enabling your staff to focus on higher value tasks that can fetch a higher ROI. Additionally, automation leads to enhanced accuracy and in turn fewer complaints or issues, which can lead to improved staff morale.
7) Improves customer service: Automation integrates the order processing software and production-associated system, thereby providing immediate access to customer account information for your sales representatives. Easy access to customer information frees up more time for staff to provide better customer service, thereby increasing customer satisfaction.
An experienced and reliable specialist partner can transform your order-to-cash process. At QX Global Group, we have supported our clients’ initiatives to automate the order-to-cash function. We use the right mix of process optimization and intelligent automation to optimize cash flows for recognized players in industries like recruitment, student accommodation, and manufacturing amongst others.
Speak with our experts to get a customized O2C solution for your specific organizational needs.
Originally published Jul 29, 2021 07:07:55, updated Dec 08 2021
Topics: Process automation