Finance and Accounting

The benefits of implementing an Order-to-Cash solution for your business

The order-to-cash business process (O2C) is pivotal to building good customer relationships and optimising working capital. It starts when a customer places an order for a product or service and spans all the steps until the company receives payment for the order.

The end-to-end O2C process includes diverse functions such as invoicing, delivery, accounts receivable, and data handling, and must therefore involve and align several departments across the organisation. Inefficiencies in any of these operations or departments can affect the customer experience and impact the company’s cash flow or reputation.

In this article, we will discuss the importance of optimising the O2C process and the benefits of order-to-cash automation.

How does order-to-cash automation impacts your organisation?

Often, companies focus more on branding and marketing and downplay the importance of the O2C process. In reality, O2C has a more direct impact on the customer experience and cash inflow. Here is why optimising O2C is critical:[1]

• The O2C process impacts not only accounts receivable (AR) but also independent units such as supply chain management and inventory management. Delays or bottlenecks in the O2C cycle can disrupt operations in these segments.
• An inefficient O2C process inhibits cash flow and liquidity. This often has a ripple effect on functions such as procurement, accounts payable, payroll, and acquisitions.
• An efficient O2C process is crucial for maintaining the company’s credibility, reputation, and customer loyalty.

Why does your business need order-to-cash automation?

O2C automation is the best way to boost your company’s efficiency and profitability.
Legacy tools and systems, which were designed to handle physical products, upfront payment, and limited traffic, fall short when companies scale up or adopt newer business models such as pay-per-use services. They also rely excessively on manual intervention for integrating diverse operations and datasets.
An automated O2C solution eliminates labour from the equation and ensures accuracy, scalability, and seamless operations across the organisation.

Benefits of order-to-cash automation

Integrating and standardising the diverse functions that make up the O2C process spells huge wins for your organisation. Below are the key benefits of O2C automation:

Increased speed and efficiency

The core steps in the O2C process include order and credit management, order shipping, invoicing, AR, payment collections, and data management. Needless to say, managing the O2C cycle requires coordination and collaboration across multiple functions and departments.

Legacy systems lack the features to enable seamless communication and break across data silos. An automated O2C solution streamlines and integrates these workflows and enables seamless data transfer across departments. With minimal friction, your business can avoid bottlenecks, delays, and errors.

Accuracy

Digital solutions automate tedious manual tasks like order management, invoicing, revenue recognition, and dunning. Automating O2C eliminates human errors, such as typos in billing amounts and incorrect shipping addresses, ensuring accuracy in the process.

Scalability

Cloud-based APIs are designed for scalability. When your transaction volumes increase due to mergers, acquisitions, or organic growth, automated solutions allow your business to scale effortlessly.

Customer satisfaction

Digital-first customers expect a seamless buying experience. Delays in delivery or glitches in the payment process can cost your organisation loyal customers and further business opportunities. With digital O2C services, you can offer an enhanced customer experience while safeguarding your brand’s credibility and reputation.

Employee satisfaction

Automating the O2C business process relieves your human employees from mundane jobs such as manual data entry and invoicing, freeing them for more creative and strategic tasks. Besides boosting their morale and productivity, this adds long-term value to your business.

Profitability

O2C automation drives profitability in several ways, such as –

• Optimising the AR function, which improves cash flow and liquidity
• Reducing the time-to-market
• Enabling digital business models with a wider reach and multiple payment options

Studies show that O2C automation can boost sales revenue by 1% to 3% and reduce operational costs by up to 30%.

Enhanced visibility

Order-to-cash automation digitises each step of the O2C process, enabling real-time visibility into the relevant data and actions. This greatly simplifies reporting, auditing, and data analytics.

For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.

How can Infosys BPM help?

Infosys BPM provides end-to-end solutions for order-to-cash process automation. Our O2C services assist you with early revenue recognition, improved day’s sales outstanding (DSO), and enhanced user satisfaction. Our niche offerings include revenue assurance solutions, pricing analytics, industry analytics, cash flow analytics, and fraud management.

Learn how your business can thrive with Infosys BPM O2C services.