The very best way to streamline your O2C cycle and increase your business’ financial efficiency is automating the cycle. It’s such a golden ticket to reducing errors, speeding up cash flow, and freeing up your team to focus on what really matters that I’m surprised this isn’t top agenda for every business owner.
If you’re confused about what the O2C cycle is, don’t worry; you’re not alone. We’ve all been there. To put it simply, the O2C cycle is the entire process from when a customer places an order to when you’ve got their payment safely in your account. Sounds straightforward right? Actually, it’s anything but.
In this article, we’ll talk about the strategies you can employ to streamline this process and get your business running like a well-oiled machine.
1. Embrace Automation
Every business has a set of minor (yet valuable) tasks that can be performed by anyone. The person handling them has to sit at a desk doing the same thing they did the past year at that desk.
Such repetitive tasks should be handled by machines. There’s Order-to-Cash (O2C) software for this. Whether it’s generating invoices or sending payment reminders, automation tools can do it faster and even more accurately than your best employee.
And it’s not just about the speed. With automation, you’re sure of consistency in your process. There’s no fatigue or emotional turmoil experienced by machines. Plus, your team gets some more free time to tackle the tasks that really drive your business.
2. Use Standardized Procedures
As much as we love to dump on repetitive tasks, they’re great for one thing- at least you have a procedure. Without a set of standards, your O2C process would be all over the place.
Instead, you need to create clear, step-by-step procedures for each part of the O2C cycle. Right from the payments processing stage, every member of your team should be aware of the procedures.
It might sound boring and repetitive (probably does), but it’s the kind of boring that brings fewer headaches and more money in the bank.
3. Break Down Those Communication Barriers
A business is like a family. Everyone should be in contact with each other. Without it, there could be disharmony, especially if each member of this family has responsibilities that depend on another member.
If your sales team, operations support and finance workers aren’t talking to each other, then you’ve got a problem. It’s not just nice to have them talking…it’s essential.
Consider introducing a platform where information flows freely for everyone. When you’ve got everyone on the same page, orders will get processed faster, invoices will be more accurate and customers will be happier. Everyone wins.
4. Upgrade Your Tech Game
Can we leave spreadsheets as a tool for managing the O2C cycle in the past? There are modern billing and invoicing solutions that can transform your process. I’m talking about real-time updates, automatic calculations, and even integrations with your other systems.
Beware though- just because it’s trendy doesn’t mean you have to try it. Take your time to find a solution that fits your needs.
5. Keep Your Eyes on the Reviews
At companies, there’s a regular audit, about every quarter to analyze how well or poorly they’re doing. Then based on that, they make changes to their entire process; could be reducing the hands on deck or switching marketing tactics. You should be doing that as well.
Set time each month or quarter of the year to review your process. Try to identify areas that seem to always have errors. It might be as exciting as the repetitive tasks, but it’s these regular check ups that keep small issues small and manageable.
6. Put Your Customers in the Spotlight
The customers are the star of this show. I mean, without them, you wouldn’t even have a business to run. Making your O2C cycle customer-centric is simply great logic.
What does that look like? Clear communication at every step, right from order confirmation to delivery updates. It means making it super easy for your customers to pay for services or goods that you provide.
It also means being available and responsive to their needs, because issues will pop up, no matter how streamlined your process is.
Where To Start
If you’re confused about where to start, here’s a tip to help you identify which step of your process needs urgent saving.
The first thing you should do is identify the biggest problem you’re having in your O2C cycle. It could be delayed invoicing. Do that, and when you found out the issue, focus on implementing one of the strategies explained in the article to address it.
You have to take one step at a time though. And remember, this process doesn’t exactly have an ending. You have to keep refining and improving it. “That’s a lot of work” I know, but the relief that comes after is absolutely worth it. That means faster cash flow, happier customers, and a reliable team.
For more information, tips and tricks. Check out our blog.
