Acquiring An Order To Cash Solution: A Comprehensive Guide
Increase Working Capital
Professionals in the financial and accounting departments of business particularly those responsible for collections and customerservice recognize that acquiring an Order to Cash Solution (O2C) is critical to ensuring the efficient management of the entire payment process. Companies of any size must focus on utilizing comprehensive O2C solution to improve their cash flow and working capital.
From the Executive’s perspective, an O2C Solution is invaluable to businessesuccess. The advantages of relying on an O2C solution are numerous, and include complying with regulations, gaining greater visibility into the order-to-cash cycle, streamlining customer billing and fulfilment, receiving payments accurately and on-time, optimizing cash flow, decreasing time and cost associated with manual processes, and increasing overall customersatisfaction. This guide will walk through the steps necessary to acquire an O2C solution for your business and ensure that you have the accurate, real-time visibility you need to support productive working capital management strategy.
Step One: Research Vendors
It is important to explore the options available from vendor before committing to specific solution. variety of O2C system providers exist, each offering different features and benefits. Conducting research to compare implementation costs, installation times, ease of use, and other costs associated with each system is important. Additionally, understanding the vendor’s customerservice standards and on-going costs is important, so that you can gauge how reliable the system is. Also, ensure that you have clarity on whether the O2C software will interoperate with other systems or stand-alone as needed.
Step Two: Assess Current Order-to-Cash Cycle
The ability to accurately assess the current order-to-cash cycle is essential in evaluating the need for an automated O2C solution. This step will address where the process is working well and where the pain points are that require intervention. This can be achieved through analyzing the key components of each process (accounts receivable, billing, customerservice and communication, collections etc.), understanding any errors caused by manual processing and how changes can benefit the organization. The assessment phase should also factor in existing human capital and financial resources, as well as the goals of the organization and possible growth objectives.
Step Three: Identify Key Performance Indicators
The specific KPI’s associated with an O2C solution vary by business and industry; however, the important ones to focus on are the ones that will support working capital management. Since everyone in the organization will be impacted by the system, it is important to assess not just the cost benefits, but also the time savings. Examples of key performance indicators could include DSO (Days Sales Outstanding), AR Outstanding, and Cash Collections.
Step Four: Test the O2C Solution
When narrowing down potential vendors, testing the system is crucial step. This time can be used to evaluate the functionality and key performance indicators before selecting specific solution. This will ensure the organization is investing in the right O2C solution, and allows the company to see how easy it is to use.
Step Five: Training Implementing the O2C Solution
The training stage of new O2C solution is critical and should involve all members of the organization. The training program should be aimed towards the financial, operations and customerservice team. This stage should follow the implementation process and ensure all teams are working together to successfully manage, maintain and use the system. Additionally, during implementation all existing customer records will be migrated, giving existing customers access to the system with their existing data, and allowing new customers to also be onboarded effeciently.
Step Six: Optimising the System
Once the O2C solution is running successfully, it is important to optimise the system for optimal performance and greater efficiency. This is an ongoing process, as the system should be constantly monitored and revisited to ensure the system is keeping up with current demand. Additionally, understanding whether customers are being billed accurately, and making sure all payments are received on time is key.
Conclusion
An Order to Cash Solution is essential for any business looking to improve efficiency, reduce costs and overall deliver better customer experiences. From the C-Suite perspective, investing in an O2C system should improve working capital and provide solutions that are backed with accurate data and appropriate security standards.
Following the steps outlined in this guide research vendors and compare options, assess current order-to-cash cycle, identify key performance indicators, test the O2C solution, train and implement the solution, and optimise the system yields all the benefits of an automated O2C solution without the stress and hassle associated with manual processes.
