If you’re a business owner, and you’ve heard about some things about how your peers have automated some of their processes, but it’s all new to you, and you’re still on the fence on whether or not to follow suit, this article is for you.
Perhaps you’re afraid of change, how much it’d cost to implement said changes, or just worried about job displacement. Whatever doubts you may have, though valid, the benefits of automation may be worth it.
The O2C process starts when an order is placed up till you receive payment. It’s a complex, multi-stepped process and is often littered with manual error caused by the human processes you’re accustomed to. Automation will get rid of these problems.
In this article, we’ll walk through each step of the O2C process, talking about how automation can be implemented and the benefits you’ll enjoy with it.
Order Management
How to automate:
There are a lot of options for automation while managing orders. You could:
- Integrate order capture systems with your backend ERP. That could mean setting up an e-commerce platform that automatically feeds into your order management system, or implementing EDI (Electronic Data Interchange) for B2B transactions.
- You can also employ AI-powered chatbots to handle simple order inquiries and updates (companies out there do this already), creating time for your team to perform more complex tasks.
Benefits:
- Fewer data entry errors means fewer order complaints down the line.
- Faster order processing means happier customers and quicker time to revenue.
- Improved order visibility often translates to better inventory management and forecasting.
Credit Management
How to automate:
Automation strategies for managing credit include:
- Implementing automated credit scoring models that can instantly assess a customer’s creditworthiness based on clear predefined criteria. You’ll be able to pull data from various sources so you can make your own customer history, to make quick, accurate decisions.
- You can also set up automated alerts for whenever a customer approaches their credit limit. That way, your team proactively manages credit risks.
Benefits:
- Faster credit decisions mean less waiting time for customers and fewer lost sales.
- Lower financial risk through more accurate and consistent credit assessments.
- Improved customer relationships by offering appropriate credit terms more quickly.
Order Fulfillment
How to automate:
Fulfilling orders through automation could mean:
- Using Warehouse Management Systems (WMS) to optimize picking routes, manage inventory in real-time, and even integrate with robotic picking systems for high-volume operations.
- Automated conveyor systems and sortation equipment can speed up the fulfillment process, and reduce the physical strain on your workforce at the same time.
Benefits
- Faster order fulfillment leads to improved customer satisfaction and loyalty.
- Fewer picking errors mean less returns and associated costs.
- Better inventory management reduces stockouts and overstocking.
Invoicing
How to automate:
Making your invoicing process an electronic one opens a whole new world of opportunities.
- Set up your system (O2C software) to automatically generate and send invoices as soon as an order is shipped.
- Implement customer portals where clients can view and download their invoices at any time.
- Consider setting up automated subscription billing for recurring orders to further streamline the process.
Benefits:
- Faster invoice delivery speeds up the payment cycle and improves cash flow.
- A more eco-friendly business due to reduced paper waste and associated costs
- Better accuracy in invoicing translates to fewer disputes and faster resolutions.
Payment Collection
How to automate:
Up until this point, the process has been to make the customer’s experience better. Collecting payments effectively is for the business. And you can do that by:
- Implementing a robust payment gateway that can handle multiple payment methods, from credit cards to ACH transfers and even newer options like digital wallets.
- Setting up automated payment reminders that can be sent via email or text message based on customer preferences.
- Implementing an automated cash application system for B2B transactions that can match incoming payments with open invoices, even when remittance information is incomplete.
Benefits:
- Improved cash flow through faster, more reliable payment collection.
- There’ll be less time spent on manual payment processing and reconciliation.
- Enhanced customer convenience leads to improved satisfaction and loyalty.
As you can see, automation has the potential to transform every step of the O2C process. But it’s not just about implementing new technology – it’s about reimagining your entire workflow to be more efficient, more accurate, and more customer-focused.
Though implementing automation isn’t exactly stress-free. You’ll need an initial investment of time and resources, and your team will need to adapt to new ways of working.
But after that early phase, the long-term benefits – increased efficiency, reduced costs, improved cash flow, and enhanced customer satisfaction – would be worth it.