Order to Cash (or OTC) is an acronym that most businesses are familiar with. It is defined as a business process that addresses the entirety of the order processing system, from how it receives, processes, manages and completes customer orders.
Specifically, the OTC process includes 8 steps:
- Customer order placement
- Order management
- Credit management
- Order fulfillment and shipping
- Invoicing and billing
- Accounts receivable
- Payment collected
- Data management
This article will share the benefits of optimising the OTC process and share some insights into how this can be achieved.
Since the OTC process is ultimately responsible for driving the entire payment process, it has an impact on both a company’s bottom line and customer relationships so obtaining efficiency is imperative. The benefits of an optimised OTC process can be condensed into 3 areas, namely:
- Revenue generation
- Customer experience
- Cost savings
Revenue generation
The OTC process includes all invoicing and payments hence by streamlining this and ensuring a prompt collection of cash, it can be an easy way to increase a business’s cash flow.
Customer experience
An important part of customer experience includes accurate invoicing, ease of payment and swift fulfillment. If this is done efficiently, the positive customer experience could win the company further business as a result of customer advocacy or repeat business. On the contrary, if done poorly, the negative customer experience could be damaging for a business costing them their reputation and repeat business. Optimising the OTC increases the overall reliability of the process ensuring a positive customer experience.
Cost savings
An optimised OTC process can uncover further cost saving opportunities across the business be it through the elimination of errors or a streamline of business processes thereby reducing overheads. Ultimately an increase in cost savings leads to an increase in cash flow, resulting in a healthier business.
How to optimise the OTC process
As with any step-by-step process, there are two ways it can be optimised: either by reducing the number of steps or enhancing the efficiency of the steps. When seeking ways to enhance the process’s efficiencies, the solution lies in automation.
Since each business operates differently the optimisation strategy will vary from business to business. Before deciding on the right strategy, a business needs to analyse its current OTC process and take note of any issues or barriers to timely collection of cash and identify actions to address them.
Cubility is a management and technology consultancy that works with businesses to solve operational problems through tailored solutions. Our holistic approach transforms businesses by refining efficiencies and increasing their bottom-line. To speak to one of our consultants about how to optimise your business’s OTC process please get in touch with us, we would love to hear from you.
