Order To Cash Solutions: A Guide For Executive Finance
CASH APPLICATION PROVIDER
CFOs in the finance departments of many companies today find themselves looking for cost-effective solutions that streamline processes, lead to improved accuracy, and simplify their jobs. An Order to Cash (OTC) Solution is one such solution that provides this much needed value in the financial operations of many companies. An OTC solution supports organizations in automating the invoicing and payment processes for customer orders and delivering insights for cash optimization.
This guide discusses the characterizing features of an OTC solution and offers details about the underlying managed services, enabling CFO to make sound decision in implementing an OTC solution. Understanding the OTC processes, their benefits, and the associated software products are also discussed.
What Is an Order To Cash Solution?
An Order to Cash (OTC) solution is an automated system designed to enhance the order-to-cash processes. It corresponds to customer orders, invoicing, cash application, customer service, and customer account analysis activities. As part of its concept, an OTC solution comprises end-to-end monitoring and controlling of financial activities in order to manage customer orders, invoices, payments, and credits in cost-effective and efficient manner.
OTC solutions are customized to meet the needs of specific organization. Most organizations reap potential benefits in improved cash flow, improved customer relations and better customer services. OTC systems and processes enable accurate, efficient and quick customer services. They offer improved visibility of customer and account data with fewer chances for data-entry errors. An OTC solution helps organizations not only to increase operational efficiency, but also to increase customer satisfaction.
Features of an Order To Cash Solution
These are some of the features of an OTC solution:
? Automated invoice generation: Automation of the entire process of order to cash, including invoice preparation, delivery, and reconciliation.
? Improved cash flow: Speedy and accurate cash performance enabled by improved order processing and collection activities resulting in improved cash flow.
? Comprehensive customer service: Capability to manage customer payments, disputes, and orders efficiently and quickly resulting in improved customer satisfaction.
? Intelligent rule-based exceptions management: Utilization of setups and rules to manage exceptions and communicate with customers, providing clear understanding of the process.
? Accounts receivables (A/R) and collection visibility: Increased visibility of A/R and collection data which enables finance executives to make better decisions and streamline various A/R and collection process.
? Easy integration and feature flexibility: Ready-to-use integration and feature flexibility, allowing organizations to integrate seamlessly with any ERP systems.
? Advanced analytics and reporting: Advanced analytics and the ability to monitor data and report on trends in significant ways.
? Improved compliance: Rules-based customs and unified process compliance, resulting in reduced processing costs.
? Automated bank reconciliation: Automated bank reconciliation capabilities that make sure all transactions are tallied and balanced quickly and accurately.
The Benefits of an Order To Cash Solution
These are some of the key benefits of an OTC solution:
? Automation of manual processes and improved accuracy: Automation of most manual processes in the order-to-cash process, providing improved accuracy and higher productivity.
? Higher customer satisfaction: Improved customer service and faster response time due to real-time status updates and automated follow-up.
? Increased revenues: Generate higher revenue through improved payment processing capabilities and faster payment collection.
? Improved cash flow: Improved cash flow due to reduced days sales outstanding (DSO) and reduction in order-to-cash cycle time.
? Reduced cost: Automation of OTC processes leads to cost savings due to reduced manual work and improved accuracy.
? Improved compliance: Compliance to local country regulations and industry standards, reducing compliance risk.
? Enhanced visibility: Enhanced visibility of customer and account details enabling better decision-making.
?Improved security: Improved security through automated process delivery and audit trail capabilities.
The Software Components of an Order To Cash Solution
An OTC solution typically comprises combination of software components, depending on the organizations specific requirements. These components play an important role in improving the order-to-cash process.
? Cash Application: Automation of the payment reconciliation process between payments received from customers against open invoices.
? Customer Account Analysis: Generate detailed analysis of customer accounts, enabling improved customer service capacity.
? Self-Service Portal: Provide customers with real-time access to orders, invoices and make payments through portal.
? Automated Dispute Resolution (DRS): Automation of dispute resolution process, providing improved visibility and faster resolution.
? Automated Collection Letters: Automated generation of collection letters, reducing manual efforts and ensuring compliance with regulations.
? Billing and Invoice Management: Automation of billing and invoicing process, including data entry, invoice verification, delivery, and storage.
Conclusion
An OTC solution offers organizations improved accuracy, faster response time, higher efficiency, and cost savings. Improved customer relations and compliance are also keys to success. In short, an OTC solution is empowering organizations to manage customer orders, invoices, payments, credits, and collection quickly and accurately, leading to improved operational efficiency and greater customer satisfaction.
It is recommended that CFOs evaluate the different OTC solutions available, their associated services, and the need for integrated software components in order to make smarter decision when selecting an OTC solution for their organization. Doing so can not only save resources and alleviate manual efforts, but also enable improved accuracy and fewer errors in the order-to-cash process.
