Integration that streamlines the Order-to-Cash process
Getting paid is the whole point of running a business. It sounds obvious, but there are plenty of obstacles between first customer contact and the money actually landing in your account.
In industry terms, the chain from order to delivery to payment is called Order-to-Cash, or O2C. It's a critical business process – one that drives revenue, shapes customer relationships, and determines how efficiently your operations actually run.
The O2C process uses and generates a lot of data and often involves many systems and applications, making it extra complex. The process may look different depending on the company, but the main steps are generally:
- Order entry – The order is received from the customer, the order information is verified and the order is entered into the system. In this step, both e-commerce platform, ERP system and CRM system can be involved.
- Order fulfillment – The goods are picked and prepared for delivery. A WMS system is often used to manage inventory and manage the pick and pack process.
- Shipping – The goods are transported to the customer. A TMS system, combined with the services of a 3PL provider, is typically used to manage the transportation and tracking of the goods.
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Invoicing – Create and send an invoice to the customer. The ERP system is often used to manage invoicing and payment terms.
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Payment – Receive payment from the customer. A payment system, or external payment service, can be used to manage the payment process and the ERP system is used to match the payment against the invoice and update the payment status.
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Cash management – The payment is reconciled against the customer's invoice. Here, a point of sale (PoS) system is often used to track and report all transactions and payments that have been made.
A process with many challenges
Among the biggest challenges to the O2C process are:
- Data management – the process generates large amounts of data which can be a challenge to manage effectively, especially when many different systems and applications are involved.
- Ensuring the process is consistent and error-free – errors can lead to delays in delivery, invoicing and payment.
- Managing a large number of payment methods and currencies.
- Monitoring and tracking the process – especially difficult for large companies with complex supply chains.
Order-to-Cash: Where integration delivers the biggest impact
In the report "The business value of data and integration maturity" (Radar group, 2023), Swedish businesses identified order-to-cash as the business process they've succeeded best in automating – ahead of other key processes.
- 86% of the respondents experienced a significantly shortened time from customer order to the invoice being paid - and thus an improved liquidity in the company.
- The shortened lead time was explained by 70 percent of the respondents as being directly due to the integration platform.
Automate Order-to-cash with iCore
The benefits of automating the O2C process are many and can help companies improve efficiency, reduce errors and increase customer satisfaction, among other things.
Contact us and we'll tell you more about how we can help you always get paid on time!