Unlocking capital through smarter order-to-cash strategies

O2C can be more than a payday helper

For organizations that may manage tens of thousands or more transactions a day, that’s a lot of rich data that can be mined for patterns. New O2C solutions, like High Radius, for example, provide the ability to analyze best performing suppliers and vendors and identify what drives their smooth, on-time payments by factors that can include incentives, variables in billing cadence or even channel. Harnessing these capabilities beyond simple invoice and collection transactions can shift organizations from reactive collections to predictive and personalized receivables strategies. That can mean capital-freeing insights into customers more likely to pay late and why, those that may pose credit risks or ones where terms need to be renegotiated. The net result? More information to drive regularized payments and more available capital to allocate and invest.

Industries that can benefit most from O2C

Any organization with a high transaction volume, decentralized revenue streams or recurring billing complexity stands to gain significantly from O2C optimization. That might mean large telecommunications companies where millions of small monthly charges require flawless execution and timely collection. Or pharmaceuticals distributors, where payment is impacted and affected by the variables of complex supply chains and negotiated pricing. CPG companies that operate a portfolio of brands can gain crucial insight into brand-level cash flow across industries and geographical sales territories that can drive strategic shifts. And the vast number of SaaS and digital media companies that demand recurring revenue can spot flags and friction points in the billing experience as well as reduce churn and support customer retention.

Overcoming the roadblocks to O2C optimization

Despite the benefits, many organizations can be slow to realize it’s time to evolve order-to-cash practices. The reasons for roadblocks are numerous: fear that it’s a large and slow technological transformation or costly, concerns over technology integration or the simple inertia of “this is how we have always done this” can hinder progress. If you’re an advocate for O2C optimization in your organization, start with educating and updating leadership on the speed, relatively inexpensive cost and business use cases that modern O2C solutions can begin delivering almost immediately. In many instances, as much as 80%–90% of manual processes can now be automated and streamlined. Bring in other stakeholders too — legal, sales and operations. Collections don’t happen in a vacuum. Terms, fulfillment, service and communication all play a role in how and when customers pay, so it’s vital to have everyone on the same page and with an up-to-date understanding of O2C evolution.