The order-to-cash (O2C) process is a vital one to any business, but for many, it’s still heavily manual, which can lead to a myriad of challenges. Automation can relieve many of the headaches.
The O2C process is where customers and businesses interact, where orders are placed and fulfilled, customers are billed, disputes are resolved, and payment is collected and processed. Given its customer-facing nature, O2C is also where a business’ reputation is made or broken. If a customer has a good experience, they will likely return and may well tell others about your company, leading your business to expand. If the experience is poor, especially if it concludes with an unpleasant cash collection interaction, the customer may leave for good and go elsewhere, and in the global electronics market, there is always somewhere else to go. It can also lead to a negative reputation that may keep other potential customers away.
There are multiple ways a company can stumble in the O2C process. Order fulfillment can be slow, orders can be shipped late or incorrectly, errors occur through mistakes in data entry, disputes are handled poorly or, more generally, customers just don’t feel they’re getting the attention they need. Throw in the additional challenges of orders arriving from multiple channels, including fax, email, EDI or the company website, creating accurate invoices, ensuring payment and collections are on time—and the environment becomes one that is difficult to manage.
However, for many the O2C process is still a very manual one, which presents its own share of problems. It’s inefficient, time-consuming and error-prone, and doesn’t provide any visibility to the order process, nor any actionable intelligence for making timely corrections. This is where electronic purchasing automation software can help.
Automating the myriad processes within the O2C environment can solve a lot of problems. It can save money by reducing processing, equipment and personnel costs, as well as increasing employee productivity, while cutting the processing time up to 80 percent. Staff levels remain consistent even when order volumes increase, employees can focus more on core activities and customer service representatives have more time to interact with customers to provide a better customer experience. The O2C process is more efficient, orders are processed and fulfilled more quickly and with fewer errors, and customers have self-service access to information they need. All of this leads to the ultimate goal: happier customers.
We’ve seen the results. Through automated electronics business software, one customer was able to cut order processing time from six to two minutes, and another reduced the number of customer calls by 2,000 per month. Yet another company reported a 40% annual growth rate without having to hire more staff and reduced errors by 30%, accounting for $250,000 in savings per year. The increase in efficiency and reduction in processing times and costs are significant, and are readily available with the metrics available via dashboards in real time.
O2C processes are a critical part of any business. They encompass the majority of the touch points between a company and its customers. With the speed of a growing business, manual processing can’t keep up. With automation, companies can not only scale their operation, but can also improve their customer experience, increase service levels, and even benefit their bottom line.