Today’s economy is largely tied to modern technology, with businesses focused on efficient revenue growth and customer satisfaction. Similarly, the Order-to-Cash (O2C) process is a prime element of the operations cycle affecting a business’ outcomes.
O2C automation provides multiple potential competitive benefits. It enables businesses to weed out system inefficiencies, optimize performance, and improve the employee and customer experience. But is it really that important?
This blog explores how automating the O2C process may elevate a businesses’ digitization efforts.
What is the O2C process?
It is an entire cycle from order management to payment collection. This process begins when the business receives, manages, and endeavors to complete orders. It continues further into tracking and, ultimately, calculating the Days of Sales (DoS) with reporting.
What role does O2C play in business?
The cash flow within an organization rests upon the O2C cycle. Reducing processing times reduces the DoS and payment time for orders, allowing businesses to keep up with a seamless cash flow.
Streamlining the entire process reduces outstanding DoS, thereby increasing transparency, eliminating bottlenecks, and improving user satisfaction.
A business’ O2C process is directly linked to their business cash flow and can have major impacts on it. 51% of businesses spend most of their time in the data entry of O2C processes. This directly affects customer satisfaction and business profitability. Apart from that, manual processing is often subject to errors ,whereas automating O2C reduces cycle time by 60%, diminishing cash flow inefficiencies.
More benefits include:
Digitization, compliance and JIT inventory management
By taking a comprehensive approach to digitization, you can ensure you meet appropriate business standard compliance. After all compliance needs are met and a JIT inventory management system is in place, the final deliverables are deployed immediately and are error-free at the onset. According to the Boston Consulting Group, adopting a digital and automated order-to-cash platform can boost revenue by 1 to 3% per year.
Manual approaches cause process delays, which affect payment allocations and disrupt cash flow. Automation can lead to error-free business processes, resulting in savings in money, time, and resources, improving business process management.
Process visibility in real time
Automating the O2C process grants visibility in real time, allowing for optimal transparency amongst business partners. The tedious tasks of auditing and reporting are also simplified, enhanced and monitored for all interactions throughout the process.
Automation takes care of data duplication and missing data entry for any document in the system. It also includes timely notifications to the correct entities, such as periodically raising invoices. In addition, you can similarly, accelerate every step involved in the O2C process, including order management, order fulfillment, and invoicing.
Reduced Days of Sales
Automating the O2C process can eventually lead to faster payment collection, along with better cash liquidity and management.
Combining process automation with efficient inventory reporting can result in complete business transformation. The automation of the O2C cycle considerably reduces manual effort and improves cash inflows for greater sustainability.
What’s more, automation can ease the considerable pressure on the workforce, enabling them to focus instead on the timeliness of deliveries and customer satisfaction.
Other advantages include attaining full process transparency and the data-driven foundations needed to make production more efficient, along with actionable insights, higher profitability, and enhanced risk mitigation.
With all of these ample merits, automating the O2C cycle can prove to be a revolutionary turning point for your business.