Md.Mustakim Ahmed 🧙‍
Jasbir Singh
Ajay
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Order to Cash (O2C)

Order to Cash (O2C)

Summary:

  1. The definition of Order to Cash:
  2. Order to Cash steps:
  3. Order to Cash optimization:

 

The definition of Order to Cash:

L’Order to Cash (O2C) is a process that covers the entire customer cyclefrom the order of a product or a service to the collection of the invoice.

The objective of theOrder to Cash is to optimize :

  • The sales process,
  • To maximize revenues,
  • To reduce possible errors,
  • Minimize late payments,

 

Order to Cash steps:

The process may include several steps:

  1. Receipt of order: it is usually placed using a payment form by the customer. The objective is to track the statistics of the page.
  2. Product availability: it is important to check that the requested products are in stock and available for delivery. The objective is to avoid as much as possible customer dissatisfaction due to a delayed supply.
  3. Delivery Preparation: once the product is purchased, the product must be sent to the sender. It is necessary to anticipate its delivery and to find the best process to save time.
  4. Delivery of the order: the order is sent to the customer via a carrier or an internal delivery service. The goal of the operation is to benefit from the best possible distribution network.
  5. Billing: the order has been delivered, or the service has been provided, an invoice is generated and sent to the customer. The objective is to think of a fast and automated way to send the invoice.
  6. Payment tracking: the client company must honor its invoice by the due date. It is important to follow up on payments by reminding your customers. This allows you to anticipate a collection procedure and to manage customer risk.

This process varies from one company to another depending on the specificities and internal processes. A service company will have a Order to Cash different from that of a product company.

However, the billing and payment tracking remain a priority for these two types of companies.

 

Order to Cash optimization:

Optimize theOrder to Cashis to improve the sales process. But it’s also about maximizing the company’s revenue. This optimization requires a few key actions:

  1. Digitalization. It is the key to automate certain tasks, such as automatic sending of invoices, customer reminders, and real-time inventory control. Automation saves considerable time and reduces the number of errors.
  2. Customer risk prevention. This is the starting point for all
    good customer relations
    . Properly executed prevention avoids many unpleasant surprises. Is the cash flow of the company, with which you have a commercial agreement, healthy? Does the payer profile inspire confidence?
  3. Payment and collection. This is the last phase of the O2C. It often concentrates all the problems of companies ( credit management). Because this phase is not about you, but about your customer.

By using a collection software:

  • You accelerate the digitalization of your company and follow all operations with a customer dashboard.
  • You can anticipate potential customer risks thanks to a complete history of your business relationships.
  • You automate the collection of your invoices with a payment link.

The optimization of your O2C requires the use of Aston iTF.