What is Order to Cash?
Almost every organization deals with an Order to Cash, or O2C, process for short. But what exactly does it mean? What role does it play in the organization? And how can you get the most out of your process? In this blog, we'll dive deeper into the O2C process and explain why it's so important. We also show how Unifiedpost offers you solutions to improve this process.
What does Order to Cash mean?
Order to Cash literally means from order (order) to payment (cash). This process starts at the moment a customer places an order. Every step and activity thereafter, up to the final payment, is part of this process. So when we talk about Order to Cash, we mean the complete cycle from receiving and processing customer orders to receiving payment for goods or services delivered.
What is the Order to Cash process?
The Order to Cash process describes all the steps a company takes from the time an order is received until payment is processed:
- Order entry: receiving, entering and verifying customer orders.
- Invoicing: preparing and sending invoices to customers.
- Accounts receivable management: managing financial relationships with customers, including assessing credit risks.
- Payment processing: collecting and processing payments.
- Credit management: Agreeing payment arrangements and chasing overdue payments.
Why is the Order to Cash process important?
The Order to Cash process has a direct and crucial impact on a company's cash flow. How quickly and effectively a company manages its O2C process determines how quickly it can generate revenue and convert it into cash. This is critical to a company's financial health.
An efficiently optimized O2C process ensures fast and accurate invoicing, minimizes the time between delivery of services or goods and receipt of payments, and reduces the risk of defaults. This improves liquidity and the availability of working capital, which is essential for day-to-day operational management and investment opportunities.
Unifiedpost: your partner for an efficient O2C process
We offer several services to simplify your financial flow, and optimize the O2C process. Some examples:
- E-invoicing: Electronic invoicing allows invoices to be processed faster, resulting in faster payment for suppliers and more cost-efficient processing for customers.
- Payment buttons and QR codes: Adding payment buttons or QR codes to invoices makes it easy for customers to pay invoices quickly and correctly. These technologies help smooth cash flow and reduce late payments.
- Electronically registered mail and digital signatures: These tools ensure efficient and secure document handling between customers and suppliers, speeding up legal and administrative processes.
Ready to optimize your Order to Cash process?
Contact us to discuss and review the solutions needed for your business. Together we will find the best way to simplify and improve your financial flow.