How to improve your order to cash process and remove costly bottlenecks
What is the order to cash process?
The concept is exactly as it sounds, it represents the business workflow of turning a sales order into cash in the bank that an organization can leverage to continue to grow its operations. Depending on the organization and systems used the steps can vary but generally, it consists of:
1) Sales Order – an order issued by a customer to the organization.
2) Order Fulfillment – the method by which an organization processes the sales order.
3) Shipping/Delivery – the shipment of the goods specified in the sales order.
4) Invoicing – Invoicing the customer for the goods shipped.
5) Payment – Receiving payment for the invoice sent to the customer.
The above is a very simplified approach to what can be a complex process involving approval workflows, partial shipments, canceled orders, and many other speed bumps along the way that can negatively impact an organization’s cash flow.
In order to affect this process, the first step is to understand what is actually happening, not just for a specific item like the sales order or the invoice, but the process as a whole.
The value of Process Mining software
This is where process mining comes into play, this new (and rapidly being adopted) technology is transforming the way businesses look at processes in general like order to cash. Where traditionally organizations would have had to go through lengthy internal interview processes to collect knowledge on what is happening and where potential issues could occur, process mining technology can connect directly to the system of record (or records, like the ERP, CRM, and others) to transform this data in a way that provides the end to end picture of how this workflow is occurring.
With this new ability to understand the process and analyze what is occurring, organizations are able to identify:
– Process bottlenecks
– Shipping delays
– Delivery delays
– Order changes
– Automation opportunities
– And much more
With this, they can make the necessary process, system, or operational adjustments to see improvement of over 30% in efficiency. This translates directly to cash flow and an organization’s ability to fuel its success.
Once an organization has been able to implement process mining and discover what is actually occurring and where the bottlenecks are, the next step is to make it proactive. Because process mining software looks at and understands data as a workflow rather than just individual siloed actions, its use cases have expanded. Companies are now not only leveraging the technology to analyze processes but leveraging alerting capabilities to make monitoring processes like order-to-cash part of their day-to-day operations. This way they can be pro-actively notified when orders take too long to process, get lost in approval workflows, or hit internal bottlenecks.
The order to cash process is the lifeline of any organization, process mining technology can make sure that your process is healthy, and you are turning orders into working capital as quickly as possible.
Want to learn how mindzie is helping organizations improve this process? Contact Us today
James Henderson, mindzie