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How to Automate Manual O2C Processes Using Contract AI

Your order-to-cash or O2C process has a business-critical impact on customer experience and partner relationships. Manual O2C tasks cover the entire gambit of activities that is done manually for most companies, and it takes away a lot of manual hours in doing tasks that are repetitive and can instead be automated.

These include:

  • Entering the Order
  • Handling Order Fulfilment
  • Invoicing Details to the Customer
  • Managing Accounts Receivable
  • Following-up for Payment Collections
  • Reconciling Payment Entries
  • Managing General Ledger Entries

The process can vary in different industries as protocols are set for specific industry-relevant use cases. However, in all of these processes the common denominator is the usage of technologies such as data updates in an ERP and CRM, Email Approvals, Document Signatures, and Spreadsheet Maintenance. Common manual tasks undertaken by various operations and finance teams include tasks filings, raising requests, running reports, and submitting support tickets.

Challenges faced by Order-to-Cash Teams:

Manual Invoicing

In many organizations, the generation of invoices often relies on manual processes due to the varied invoicing preferences of customers. For example, large clients prefer their invoices to be submitted through their Accounts Payable (A/P) portals, while smaller businesses favor traditional paper-based invoices. Accounts Receivable (A/R) teams manually generate invoices to accommodate these diverse preferences, a time-consuming process susceptible to errors.

Acceptance of Multiple Payment Formats

In today’s global business landscape, A/R teams encounter the challenge of managing various payment methods. Some customers use conventional checks, while others opt for electronic options such as ACH, credit cards, BACS, and SEPA. Dealing with international payments also introduces the complexity of foreign exchange charges, further complicating the task.

Reactive and Inefficient Collections Process

Collections teams must make daily decisions on which customers to contact first. However, they often lack real-time visibility into a customer’s credit risk and payment status. Consequently, they occasionally overlook high-risk customers and reach out to low-risk ones who would have paid on time.

Slow Dispute Resolution

In cases where customers raise disputes, the deductions management team manually gathers claim documents, proof of deliveries, and bills of lading. Subsequently, they initiate investigations and work towards resolving the issue. This process is time-intensive and leads to missed opportunities for recovering funds from erroneous deductions.

Isolated Order-to-Cash (O2C) Operations and Lack of Data-Driven Decision-Making

The absence of integrated O2C operations can result in operational mishaps. For example, a collections agent may contact a customer without access to their payment status, potentially reaching out to a customer who has already made a payment. This not only creates a poor customer experience but also delays the recovery process.

Elevated Operating Costs

Large enterprises typically contend with higher operational costs. The order-to-cash cycle entails additional expenses such as bank lockbox fees, billing, and invoicing costs, among others. These increased expenditures, coupled with slow debt recovery, can impact available working capital.

Here are some manually handled documentation processes involved in any O2C lifecycle that you can automate easily using Sun Technologies’ Contract AI deployment:

Automate Order Placement and Management

It implies automating tasks pertaining to raising purchase orders, signing of contracts, making entries in the sales CRM, entering job orders in the project management tool or an ERP. This phase is preceded by the sales team initiating a sales opportunity entry into the system that gets converted into a new revenue account as soon as the contract is signed.

Automate Credit Management

Automating supplier credit management process includes all the steps involved in analyzing or calculating credit risk. This requires creating the credit portfolio entry, applying appropriate credit policy and procedures. The tasks that you can automate include Account Monitoring, Manage Credit Application, Set Templates for Communication and Follow-ups, Collection Notification entries.

Automate Order Fulfilment

Automating the order fulfilment process includes inventory and stocking maintenance that ensures adequate stock levels are maintained. The scope of automation covers every manual entry involving receiving inventory, storage, order picking, order packing, shipping, delivery, and returns. Automating ERM handling is a key aspect covered by our order fulfilment automation suite.

Automate Order Shipping

Automate all processes related to the handling of proof of delivery, bill of landing required to process cash payments and/or collections. The typical process in this stage of the order-to-cash lifecycle would involve automation of document generation and management for customer confirmation, email approvals and confirmation, raising invoice and matching it with the purchase orders or the job order.

Customer Billing and Invoicing

Automate invoice billing documentation process to make the post-delivery payment collections a hassle-free experience for customers as well as employees. With this automation suite, you can automate every touchpoint for document management involving tools such as Emails and CRMs like Zendesk, Salesforce, and the ERP in use with the help of bi-directional automation triggers.

Automate Payment Collections

Payment Collections automation can ensure data and details coming from different store or branch locations are unified in one view for easy calculations and reporting. It can help in maintaining data about invoices with pending payments, payments made, predicting the cash flow into the future, payments to be placed on hold or ones that need to be flagged, etc.

Automate Cash Applications

Automate the entire process of matching open invoices with the reconciled cash using our payment reconciliation automation suite. The steps involved include making appropriate bank transaction entries to your ERP system (e.g. NetSuite), and simultaneously posting each bank transaction to the general ledger within the system, instantly. Applying automation can help streamline your manual cash transaction reconciliation from end-to-end.

Automate Deductions Management

This step plays a key role in the order-to-cash lifecycle. It requires active coordination with the operations and finance team. Our automation ensures the bi-directional updates whenever an entry is made into the system to alert all the required employees about the issue concerned. Automation involves maintaining records related to pricing, change orders, additional customer requests, iterations, approvals, and more.

A Real-life Example of Order-to-Cash Automation

Your order-to-cash (O2C) process has a business-critical impact on customer experience and partner relationships. A leading US-Based Market Intelligence firm was manually handling – Collections, Vendor Payments, Approvals, Accounts Reconciliation, and Service Desk Handling.

Order-To-Cash Automation has helped them to:

  • 95% decrease in turnaround times
  • Over 75% improvement in critical request handling
  • 100% reduction in escalations on finance issues

Speak to one of our Order-to-Cash Solution Architects to drive more value with a mature order-to-cash process.

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