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8 steps to the order to cash cycle

How to automate the O2C process with AutoML

Central to every business, the Order to Cash process is the way businesses receive, process, manage, and complete customer orders. Today, many companies have automated parts of this process, but there are still a handful of valuable efficiencies that can be gained by introducing AutoML to your Order to Cash cycle.

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This article discusses:

  • What is the Order to Cash (O2C) process?
  • The eight steps of the O2C process
  • How Impira can help you automate various parts of your system

What is the Order to Cash process?

The Order to Cash process (O2C) is central to every business. This is how a business receives, processes, manages, and completes customer orders. All the departments involved in the O2C process need to be well-orchestrated to avoid the delays and errors that result in unhappy customers and anemic cash flow.

8 steps to the order to cash cycle

What are the steps in the Order to Cash process?

There are generally eight steps from receiving an order to getting paid:

1. Order management

There are many ways for customers to place orders. Some are automated while some require manual intervention. Online entry forms or Purchase Orders are able to directly input data to your Order Management System (OMS) through automation. Receiving orders via phone call, email, or fax will mostly require staff to enter order information into an enterprise resource planning (ERP) system manually. 

2. Credit management

Many sales are completed on credit, but your organization needs to confirm your customer’s creditworthiness before fulfilling their order. Integrate with your Customer Relationship Management (CRM) system to ensure the order is from an approved customer, or run a credit check to see if a new customer (or an existing customer placing a larger order) is in good standing. 

3. Order fulfillment

You can’t ship what you don’t have, so checking your inventory management system provides the ability to alert the customer of a potential shipping delay or to offer them an alternative item. This keeps customers happy and helps you prevent cancelled orders due to unexpected inventory delays down the line.

4. Order shipping

Unless you operate your own delivery fleet, transit times are typically determined by your delivery partners. The efficiency of getting orders on their way to your customer depends on your shipping department getting notified quickly so they can prepare shipments on time to meet carrier pickup deadlines. 

5. Customer invoicing

Accuracy of invoicing is central to ensuring timely payments from customers. Invoices are often auto-generated from your billing system, and your customers will expect accurate information within the bill. Integration with your Order Fulfillment and Shipping systems can reduce invoicing errors.

6. Accounts receivable

This step of the O2C cycle should be automated by your order management and invoicing systems. The customer’s form of payment should automatically process as stated on the invoice. You will confirm the sale and receipt of the money that came from that sale, via your OMS.

7. Payment and collections

Payment terms are often included in the invoice and pre-negotiated with your customer. Proper payment reconciliation is vital to making sure customers aren’t incorrectly shown as overdue. When customers do fall behind paying, integration to your credit department is key to ensure you don’t compound the problem by continuing to fulfill orders for the customer. If there’s an issue of any kind with collection of payment (e.g., delayed payment or lack of payment due to an error that occurred after invoicing), your collections team should reach out to the customer.

8. Reporting and data management

While this last step isn’t tied directly to getting paid for any specific order, centralizing and analyzing the data from all systems across the O2C process will help management identify areas of inefficiency, as well as allow for predictability in terms of revenue and cash flow. 

Automate parts of your O2C process with AutoML

From end to end, the O2C process can be measured in days, but the norm for most businesses is often weeks or months.

Optimizing your O2C process requires various types of automation, and whether you’re using an RPA solution or not, you can further optimize by using AutoML.

AutoML eliminates the hassle involved in maintaining traditional machine learning models by making the power of machine learning available to a much broader, less-technical audience. 

Impira AutoML is easily operated (and trained) by business users who are experts in their own respective fields, but don’t have backgrounds in data science or coding. These users know their own needs intimately, so they’re in the best position to take the reins and steer their own course. Impira AutoML adapts and learns from user input, so anyone can be confident that their changing needs and goals will be well accommodated by Impira. 

Here are some ways to automate your O2C process using Impira AutoML

Order management

Manual data entry of orders taxes your O2C process with the delays of data entry (including the time an order sits in someone’s queue waiting to be entered) and is prone to data entry errors. Using Impira, you can directly train the system to extract the information you need from your customer order forms. The data that is extracted gets validated in the system in real time. Impira AutoML will update the machine learning model and apply the updates across all of your orders. This will reduce the amount of time your staff needs to spend entering data, and allow you to get the orders fulfilled expeditiously and accurately. 

Not only does manual data entry of orders slow an O2C process to a crawl, add entry errors to the mix, and you’ve got yourself a bottleneck. 

Using Impira, you can directly train the system to automatically extract the information you would have normally rekeyed by hand. The extracted data gets validated in the system in real time as Impira updates a machine learning model and applies new learnings across all your files automatically.

CRM integration

Integrating Impira with your CRM will allow you to join data from a purchase order (e.g., company name, account number) with your customer records. For example, Impira’s function fields can be used to compare the order amount with the customers’ established credit limit. It can also be used to flag orders for human review prior to fulfillment.

Inventory management integration

Careful management of inventory is critical to ensure you have goods on hand before attempting to fulfil an order, and it can help you avoid tying up cash on excess inventory. Integration with your Inventory Management System using Impira’s RESTful APIs can ensure real-time inventory levels are reflected in your O2C process, resulting in fewer order delays or cancellations. 

Shipping logistics 

Your shipping department may be the epitome of efficiency, but if their logistics data isn’t tied back to the order, you can experience delays in getting paid. Impira can take information directly from your shipping software; or can be used to extract information from scanned shipping labels, bills of lading, or cargo manifestos. You can easily set up a field tied to each order to reflect the shipping status once you bring your shipping data into Impira.

Invoice generation

What triggers an invoice to be generated? Is an invoice generated upon shipment or when customers receive the product? If your invoices are generated monthly, you’ll want to ensure there are no delays that could lead to a 30-day impact on your cash flow. Impira’s flexibility to adapt to your specific business needs, and the ability to present complete and real-time data on the status of an order will ensure that your invoices are prepared accurately and in a timely manner.

Accounts receivable

If you have a healthy business, each customer sends you multiple payments over time. Correctly reconciling the payments received against the orders placed and fulfilled will ensure you don’t send an erroneous overdue notice and that any anomalies can be addressed by human intervention as soon as they arise. Using Impira to connect all of the steps in our O2C process will keep your Accounts Receivable department directly apprised on order details, which means fewer requests to other departments for order status reports.

Collections

Sending a collections notice to a customer is sometimes necessary. However, if an order was never fulfilled, or if a received payment was applied against the wrong invoice, then a collections notice will be unwelcome and could cause irreparable harm to your relationship with the customer.. Impira’s ability to connect all of the systems in your O2C process can minimize any errors of this nature, by giving your Collections department direct access to order and payment data.

Centralized view on organization

While reporting and data management take place outside the specific O2C process for any given order, your ability to identify inefficiencies in the process and make desired improvements requires you to have a clear and consistent view across the entire process. Integrating each of your systems with Impira can provide a centralized view, and Impira can export key data to third-party Business Intelligence tools for more in-depth analysis. 

timeline of the business process for the order to cash cycle comparing to the order to cash cycle with and without the help of AutoML


The O2C cycle spans many parts of your organization. Impira can be used to both eliminate the delays and errors of manual data entry and automate steps within the process. While there are some immediate efficiencies to be gained initially (as represented in the diagram above), Impira AutoML learns and adapts with each interaction, creating more efficiency over time. Further, the flexibility of Impira to address changes in your process or data needs allows you to increase the return on investment in other systems, and replace systems that your business outgrows, in a seamless manner.

Automate your business processes with Impira AutoML