Order-to-cash is critical to the financial success of any organization because it involves all the steps in between a customer placing an order and the company receiving paymenting for that order. These steps include order fulfillment, invoice processing, credit management, cash application, disputes, and collections.
Because of the many moving parts and stakeholders involved, the process is highly complex and end-to-end visibility is challenging. Lack of integration across functional solutions and a prevalence of manual, off-line processes add to this challenge. For example, the customer support team may not have real-time access to a customer’s latest payment activities and outstanding balance information. Not only do silos like this make it hard to assist the customer, but they also result in significant operational inefficiencies and poor customer experience. Here are top 3 challenges that order to cash teams face.
1. Diversity in Customer Preferences
Customers have preferences when it comes to placing a new order and, as a result, many organizations end up accepting orders in multiple formats – online, email, fax, telephone, paper, etc. And if any one of these channels is down or isn’t working properly to accept and process new orders in a timely manner, the effect can be significant – missed orders, fulfillment delays, and more. More importantly, it will result in frustrated customers. Of course, challenges with order fulfillment are even greater for organizations who accept and process orders manually.
Similarly, customers have strong preferences when it comes to how and where they receive invoices. Smaller customers may request paper invoices while larger customers may require you to submit invoices via their company’s accounts payable system. To accommodate customer preference, many accounts receivable teams create and send invoices manually, which is time-consuming and susceptible to error.
2. Lack of End-to-End Integration
Many organizations remain extremely siloed in how they manage the order to cash. It is common for teams across the process to leverage several different systems that don’t talk to each other. As a result, there is no way to share critical information between steps and teams in a timely manner. Without a centralized view of data, an organization cannot achieve an accurate view of (1) cash flow across the organization; (2) operational performance; or (3) employee productivity. Additionally, it makes it nearly impossible to achieve a 360 degree view of the customer which not only leads to mistakes, inefficiencies, and an overall poor customer experience.
3. Inefficient Processes
For organizations without the proper technology and automation solution in place, the order to cash teams are forced to rely on manual processes that are impossible to scale in order to complete day-to-day activities. Additionally, in the absence of accurate, centralized data, critical business decisions, from prioritizing the day’s work to developing a customer-specific dunning strategy, are being made subjectively at the manager-level. Not only does this result in poor business decisions, increased mistakes, and sub-optimized performance, but it also eats away at an FTE’s productivity, wasting time on unnecessary tasks that could have been much better spent on actions that would have resulted in much greater organizational value
Cforia is a top-rated software provider that delivers end-to-end cash-to-cash transformational services with these challenges in mind, ensuring that your business runs at a lower risk. This way, you can reduce your bad-debt ratio, automate your cash posting, speed up the collection process, and improve the dispute resolution process, and generally improve team productivity.
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