The order-to-cash process is the lifeblood of any enterprise. When it is firing on all cylinders, companies can fulfill more orders, build goodwill with customers, and focus efforts on innovative and ambitious new projects. When it is inefficient or ineffective, however, the order-to-cash process can be a huge drain on capital and a major obstacle to growth.
The greatest challenge for most enterprises is that the order-to-cash process is so complex and spread across so much of the company that making meaningful improvements is hard to plan and even harder to execute. More than one company has found that its best-laid plans only led to bigger problems and longer setbacks. Rather than relying on uncertain strategies, follow these steps to effectively streamline your order-to-cash process:
Adopt a Macro Perspective
One of the reasons that attempts at improvements often fail is because companies focus on individual elements of the order-to-cash process rather than thinking of the process as a whole. Since every element is interconnected, thinking of them discreetly is short sighted and misguided. The better strategy is to focus on the problems that afflict the entire system, and the kinds of improvements that could improve things from beginning to end. In many cases, that means implementing new tools that provide the kind of top-down perspective that is currently unavailable.
Identify the Fault Lines
Trying to streamline the order-to-cash process by overhauling it entirely is a risky and inefficient approach. The better strategy is to identify the problems that compromise the system as a whole and focus on those to make targeted improvements. Look for areas that create bottlenecks, cause confusions, lead to redundancies, and generate waste. Those are the issues that deserve your attention, while the rest of your existing order-to-cash process may be fine as it is.
Create a Shared Platform
If your enterprise does not currently rely on some kind of distribution ERP or other shared platform to manage your order-to-cash process, it will always be less efficient and effective than it could be. Any effort to improve the process will be more reliable if can be studied in total, and if changes can be reflected throughout the system. A shared platform makes it much easier for the constituent parts to communicate and collaborate while breaking down the kinds of data silos that lead directly to unnecessary mistakes.
The biggest obstacle to an effective order-to-cash process is often how much human input it requires. Not only is this a time and labor-intensive way to approach the process, it also introduces countless opportunities for errors and mistakes. As much as possible, begin to automate the kinds of routine tasks that a machine is better equipped to handle quickly and precisely. Then take advantage of the new human capital you have freed up to resolve the issues with your order-to-cash process that a machine is unable to.
Study and Revise
As you begin to streamline the order-to-cash process, identify the metrics that tell you the most about the success or failure of your efforts. Set targets at the outset. Then compare your actual progress to your projected progress once your changes have had time to take effect. It is more likely that the goals you hope to achieve will happen after a fair amount of tinkering and experimentation, so be willing to revise and iterate on your initial efforts once you have a better understanding of what is working and what is not.
Streamlining your order-to-cash process gives you a distinct advantage over the competition. Rather than staking your future on a flashy new product or service, start by perfecting the things you already do.