Optimization Of Order To Cash Solutions
Procure To Pay Vs Order To Cash
A streamlined and automated order-to-cash (OTC) process is integral to achieving optimized accounts receivable performance. highly functional OTC system enables business to efficiently manage customer orders and billing, accelerate cash receipts, and ultimately, create positive customer experience.
It is paramount that business identify the right OTC solution for their organizations individual needs. In the pursuit of improved performance from the ar-cycle, organizations need to consider two primary methods of management: procure to pay (P2P) and order to cash (OTC).
Procure to PayProcure to pay, or P2P, orders and invoice management encompasses the entire process of procurement, from sourcing and purchase order generation to invoice submission and payment. P2P solutions commonly integrate with other companiesystems, such as ERP and CRM systems, to streamline order and invoice processing, as well as payment management.
Order to CashOrder to cash, on the other hand, is focused on the customer-facing order processing and billing stages of the ar-cycle. An OTC solution typically automates the entire process of customer order processing, creating customer invoices and managing collections. Some OTC systems have additional features, such as the ability to generate issue credits and collect customer payments electronically.
Comparative PerformanceIn many cases, P2P solution can improve operational performance, leading to improved margins and higher-quality product. P2P systems provide comprehensive view of the procurement and invoice processes, enabling an organization to identify discrepancies or errors and what is needed to correct them.
OTC solutions typically provide more optimized approach to managing customer orders, invoicing, and collections. OTC systems provide visibility into customer order flows, payment status, and any disputes or issues. Additionally, OTC systems can automate the collections process, provide payment updates to customers in variety of formats, and ultimately reduce the amount of time accounts receivable teams spend on collections.
Organizations should determine the specific goals and objectives of their organization before deciding on OTC solution. Both OTC and P2P solutions can help an organization optimize their AR-cycle performance, but an organizationshould identify which system provides the greatest value and align with their individual market requirements.
ConclusionOrder to cash solutions can provide significant improvements to the accounts receivable performance of an organization. With the right technology in place, an order to cash system can streamline customer-facing processes, increase order visibility, and simplify collections. Organizations should assess their individual objectives, resources, and capabilities to determine which system will provide the highest benefit to their customers, staff, and bottom line.
