Optimizing Order to Cash Process With Automation

19 August, 2022
5min read
Patrick Petti, AVP, Value Optimization
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What you'll learn

  • To avoid data silos and improve company’s efficiency, businesses are using integratable software systems.
  • Employees are saving themselves from the tedious manual tasks by automating their workflows.
Ways to optimize the order to cash process
The benefits of revamping your order to cash process
How HighRadius helps optimize your O2C process?
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Order to cash (O2C or OTC) refers to all the processes and workflows involved in completing a sales transaction and receiving payment for it. The process involves multiple steps including order placement, order fulfillment, invoicing, payment collection, dispute management, and cash application.

Businesses, especially mid-sized ones, tend to use manual methods to complete their order to cash process. However, with automated solutions a major section of this process can be optimized to a considerable degree. Globally, businesses that have embraced automation within their finance function have observed a significant increase in cash flows, recurring revenue, and customer satisfaction.

Ways to optimize the order to cash process

The traditional order to cash process uses manual methods to complete the workflows. While manual methods may work well till the time your customer base is small, as your business grows your analysts may find it difficult to cope with the growing complexity of order to cash operations using traditional methods alone.

Let’s take a look at how we can optimize the order to cash process to strengthen cash flow, enhance customer experience, and enable your employees to focus on high-value tasks.

Digital transformation

Digital transformation is expected to add $100 trillion to the world economy by 2025

Automate the workflows
Digitizing processes is the new normal and a necessity for businesses to survive and thrive. Companies are adopting technological solutions to increase their efficiency and garner a competitive edge. With the help of automation, businesses are able to streamline their processes and eliminate manual intervention to a large extent. This enables employees to focus on higher-end critical tasks.

Standardize processes
Bigger the team, more crucial it is to have a structured workflow in place. Consistent communication using well established processes and defined policies reduce silos and make your operations smooth. Documenting tasks and actions along with a well collated repository of associated data can support analytics initiatives and improve inter-team collaboration. .

Often, different departments utilize different CRM systems, which makes it difficult for the employees to access and collate data at one place and in one format. Such hurdles increase data silos and affect the company’s efficiency. Use APIs and software solutions that can integrate with each other to ensure easy and quick data access to all relevant stakeholders.

Ensure data accuracy consistency with centralized data repository
With automation set in place, businesses can also set up a centralized data repository, and make data accessible to employees with the necessary permissions. Thus, at any given point of time, all authorized employees can access the data. Since data entry and extraction is entirely automated, the possibility of erroneous, redundant, or missing data dials down to null.

Teams using different CRM systems can make sure that their data is up-to-date at all times using a central data repository. Automated notifications can be used to notify employees of any data updates to the repository.

Optimizing customer service

Avoid automated response systems:
Many businesses tend to cut costs by automating their customer service. This may help save money, however it can jeopardize your customer relationships. Chatbots or IVR(Interactive Voice Response) can help in resolving low-level queries such as— invoices, pay due dates, credit scores and so. Although such automated messaging can be made available 24/7, they are not efficient in resolving high-end queries. For every higher-end query the customer is redirected to a representative, thus creating multiple iterations for resolution. Placing chatbots or IVR may also put off the customers if they do not receive any significant response/solution out of that conversation.

Going with a more personalized approach although, can help businesses in getting customer loyalty and at the same time will also ensure faster receivables. This process can significantly increase the expenses however for high dollar value accounts, it is utmost necessary to resolve the issues as soon as possible, before the account gets overdue.

Automate customer onboarding:
Credit risk assessment can take a lot of time when done manually. It also adds the risk of offering higher credit limits to risky customers and losing out on potentially low risk customers due to missing or wrong data entries. Thus for faster and accurate credit assessments, it is advisable to automate the entire credit risk management process including data aggregation through third-party sources, risk-based limit allocation, and customer onboarding.

The benefits of revamping your order to cash process

Order to cash process as we know acts as a major contributor in a company’s cash flow and overall revenue. Businesses should focus on improving their order to cash process to optimize their cash flow.

Recent advances in accounts receivable management technology can help businesses improve their O2C efficiency and drive cash flow. In this section, we’ll look at the benefits of revamping order to cash processes with the latest technologies.

Real-time data availability

The centralized data repository allows employees to access the required data at any given time. On top of that, a notification system to trigger data updates ensure that the records are maintained correctly. You can also integrate multiple systems to ensure data consistency. For example, your order management system can be easily integrated with the inventory management system via ERPs to ensure that all the data is accurate in real-time.

Additionally, businesses can automate their invoicing system to enable it to pull in order details, check the credit limits, set optimal payment terms, and send invoices.

Standardized systems

Seamless system integrations for companies where the teams work on different CRMs allows easy data migration and eliminates siloed workflows. All the actions and data can be readily accessed for grouping and analyzing as reports or audit trails at the click of a button.

Given how complex the entire order to cash process is, a standardized working model can optimize all the sub-processes, namely—invoice creation and delivery, receivables collection, payment processing and reconciliation.

Customer satisfaction

Resolving customers’ requests satisfactorily is key to establish loyalty and receive timely payments. Businesses that follow a ‘customer first’ approach have started to revamp their order to cash structure to improve customer experience with features such as multiple digital payment options, self-service portals, e-invoices etc.

Better tracking and visibility

With a standardized process and an automated dashboard set in place, your analysts can identify high-risk accounts and do the needful to close the accounts before they become overdue. Since everything is tracked and recorded, the key stakeholders can at any time view the status of their receivables and other process dynamics easily.

How HighRadius helps optimize your O2C process?

At HighRadius, we help businesses automate their order to cash model and unlock the features and functionality of O2C automation to its fullest. Our solution includes a set of AI-powered solutions designed to support order to cash processing for companies across industries. HighRadius solution provides

  • Fast track collections
  • Achieve zero-touch cash posting
  • Onboard customers faster
  • Monitor credit risk in real-time
  • Seamlessly integrate with popular ERPs

Want to learn more about how to increase revenue with an easier order to cash model for the office of the CFO? Talk to our experts.

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