May 9, 2023
One of the key challenges for CFOs is to reduce daily sales outstanding and speed up cash flow. They are under intense pressure to manage their working capital since cash is tied up in their accounts receivables and the Order-to-Cash (O2C) process. A typical O2C refers to all the processes and workflows involved in completing a sales transaction and receiving payment for it. The process involves multiple steps, including order placement, order fulfillment, invoicing, payment collection, dispute management, and cash application.
The traditional O2C process uses manual methods to complete these workflows. While manual methods may work well when a corporation's customer base is small, as their business grows, finance teams may find it difficult to cope with the growing complexity of order-to-cash operations using traditional methods alone. The goal is to leverage advanced technologies, including AI, RPA, and Big Data management, to deliver integrated order-to-cash automation across the enterprise to provide efficiency and real-time unified visibility that can improve cash flow for better working capital management and enhance customer experience.
O2C is one of the most complex general and administrative (G&A) processes. Since O2C touches multiple functions, ranging from commercial and sales to finance, legal, and customer support, cross-functional alignment is critical to fully understand what is happening in the O2C process, which is often lacking in corporations. Bottlenecks in one area can cause headaches for units that are completely separate. The inability to track the progress of the order-to-cash cycle often leads to unnecessary delays, which culminate in a rise in DSO and bad debts.
A high amount of outstanding receivables results in huge cash crunches. The invoicing and accounts receivable functions carried out during O2C determine the company’s cash inflows. Delays in collection can complicate accounts payable, payroll, potential acquisitions, and other issues related to liquidity. Much of the invoicing done during O2C involves plenty of menial data entry and physical paperwork, which can needlessly inflate the working capital requirements and hamper growth in the long term.
Sancode technologies has helped corporations accelerate their O2C cycle with the help of tools powered by AI, RPA, and machine learning. Sacode technologies can automate the entire order-to-cash process cycle, right from capturing and fulfilling customer orders to generating and recording receipts and collections in the general ledger, and delivering revenue analytics and reports.
AI-enhanced RPA can relieve teams of manual data gathering, while cognitive data capture extracts information from multiple sources, including unformatted documents, and eliminates manual data entry. Consolidating all data, workflows, and processes into one platform can make the monitoring, maintaining, and executing of all activities almost effortless.
With an automated dashboard set in place, finance teams can use predictive algorithms to identify high-risk accounts by leveraging historical customer data and take necessary actions to close the accounts before they become overdue.