If you're in business, you know that the steps from taking an order to getting paid can be long and difficult. This is why successful business owners are constantly trying to find ways to make the process more efficient.
When you speed up your order to cash time, you boost your cash flow and your business grows.
The reality is that if your business is riddled with inefficiencies, then instead of turning a profit and letting your product’s reputation shine, your business becomes notable for delays, defects, and other problems.
When we think of the model order to cash management systems, invariably one that comes up is Amazon. The reason why is Amazon’s system is so remarkably efficient is that customers receive their products within 48 hours of ordering.
Drilling deeper, what an astute business professional would notice is Amazon’s order to cash cycle is unmatched because they have maximized efficiency in their eCommerce platform, including their customer fulfillment commitment, order management process, and having one of the most efficient supply chains in business.
Now, pretty much every business not named Amazon lacks their logistical advantages. However, this doesn’t mean that you can’t learn how to be more efficient by studying Amazon or companies like it. Instead, a good business takes a look at several areas including enterprise resource planning (ERP), electronic bill payment and processing (EBPP), eCommerce, and automation to make processes more efficient.
Of course, embedded in these different areas are the important considerations, such as increasing customer satisfaction, finance and accounting practices, and management solutions that maximize the talents of your team.
Here are five ways your business can speed up the OTC process and make your business lean, profitable, and efficient:
1. Universal Collection Practices
Of course, this is never the easiest part of business. Accounts that don’t pay but make use of your business services are a drain on your working capital. Spending money just to get your hands on what you’ve earned is quite inefficient. But what perhaps is worse is that if you don’t have universal debt collection procedures, then your O2C system suffers that much more.
Inconsistency kills businesses.
What helps a business is having universal procedures. One way these procedures help is by improving customer service. Your customers appreciate consistency. When using EBPP systems, you can automate much of the collection process, ultimately removing the human element and potential conflicts and errors. This then allows your debt collection specialists to work on the larger accounts that are far more outstanding than just 30 days.
When your eCommerce platform and EBPP systems are integrated, this makes sending out late notices something employees don’t have to deal with. You can even create automated phone messages. The more automation means the less chance of human error eroding customer satisfaction.
2. Ease of Payment Platforms
How many times have you refused to give a company your business because their preferred payment method was inconvenient?
Some companies will only take checks because the processing fee is less than having to swipe a card. The reality is people don’t write checks anymore, and these businesses must adapt or get out of the marketplace.
Flexible EBPP systems allow your clients to pay in a variety of ways including cards or through auto-debiting accounts. You can even encourage them to pay via PayPal. Perhaps the easiest way to get payment is setting up an auto-debit system for recurring business. Furthermore, millennials by and large prefer this way of doing business, and businesses that use subscription models are flourishing.
Everything from Blue Apron to your local gym now uses these auto-debit systems, making payments easy and customer satisfaction that much greater. Also, it doesn’t hurt when trying to reduce costs that instead of having to process payments manually you can just rely on automation to do all the work. When accounts don’t pay, that’s when they get sent to your streamlined collection process.
3. Differentiate Between Collections and Disputes
Customer service still matters despite today’s less personable world. When you have customers with legitimate disputes subject to automated collection processes, there’s no way this won’t damage your reputation with that customer. That damage affects everything in the real time OTC process.
Your employees that specialize in collections may not have the dexterity to resolve a dispute and vice versa. Differentiate the two. Have employees who understand the value of customer satisfaction resolve disputes.
In order to keep business you might have to eat some costs now, but you may earn ten-fold from the customer in the future.
Empowering your employees to solve your customers’ disputes leads to increased job satisfaction. It also expands your recurring accounts receivables, and new customers will happily recommend the business that addressed their dispute cordially and fairly.
4. Incentivize On-Time Payment
Ever wonder why subscription services are often priced lower if you pay yearly rather than monthly? The reason is businesses know that customers enjoy the flexibility of being able to cancel after a month but may balk at paying for a year of a service.
Conversely, businesses know that when you lock someone in for a year they’re more likely to be retained for several years instead of several months. Either way, margin is built into the rates. Incentivizing someone to sign on for a year is why the rates are lower on everything from newspapers to gym memberships.
For your customers, you can even offer something simple like a 5 percent deduction for on-time payment in whatever way you define on-time. Your order to cash process, especially when using automation for your EBPP, becomes much more consistent when you give people a reason to pay you on-time.
5. Don’t Delay Bills:
The best part about eCommerce and EBPP systems is immediate billing. Unlike old-fashioned systems, the bill going out in the mail and waiting for the check to come back isn’t a two-week o2c process, but one that takes minutes.
Clients appreciate receiving the bill right away, especially if there is something wrong with the bill. Having billing systems work in real-time is more efficient for you and for your client. Furthermore, the automated process of billing mitigates risks for error.
With the right eCommerce platform, customers can simply check boxes of what they require, place the order, have the billing in seconds and payment comes to you in minutes. The order to cash process doesn’t get easier than that.
As you can see, the order to cash process described above takes much out the hands of people and instead utilizes technology. The goal here is having your people focus on the customer experience which, in turn, can help your business garner customers for the longer term. Having your customers get the information they need when they need it helps secure payment faster.
When you have universal procedures for the more unpleasant activities like debt collection, this also streamlines processes. Finally, when having your employees focus on customer service, including disputes, and leaving everything else up to the automated EBPP processes, what you’ll notice is your ERP systems are efficient, and in turn, your business is much more profitable.