As your business quickly expands, so does the risk of overlooking certain crucial aspects of managing it, such as order to cash, which greatly affects the customer experience. Many startup owners make this mistake and end up losing their clients to the competition. After all, it’s every customer’s wish to be provided with a smooth user experience from when they place an order to the moment they’re paying for goods or services. Convenience and speed will always be part of their decision criteria. 

At this point, order to cash automation comes in handy to help streamline business operations. While this process at first might appear to be straightforward, this isn’t the case because it spans across numerous internal company processes and entails some changes in procedures. With the rigid competition in the market, it’s clear on the need to automate your order to cash cycle. 

This article will deep dive into how automation of your order to cash process can help your business reach success. Read on to learn more. 

What’s The Order To Cash Process?

The Order to Cash process, also referred to as OTC or O2C, is a set of business procedures followed during the whole order management cycle, after your customer places an order. This process usually involves how your company receives, manages, processes, and completes customer orders as well as payment-related activities. 

Nowadays, many organizations are considering automating their OTC because of the following reasons, which include the following: 

  • Improve operational efficiency 
  • Provide a better customer experience 
  • Enhance and strengthen client relationships
  • Boost company sales 
  • Increase accuracy and precision of inventory monitoring 
  • Improve cashflow and payment collection
  • Reduce lead times

What Are The Steps Involved in the Order To Cash Process? 

There are different steps taken during the order to cash process. What happens in each step and why does it have to be automated?   

  • Order Management 

During the order to cash process, the first step is order management, which entails a client placing an order for specific goods or services. Orders are usually placed through different platforms. This includes notifying your sales representative, sending the sales department an email, or via an e-commerce platform. Consequently, you also examine the client’s order to check whether you can fulfill it and if so, give a delivery period. This is also when you need to record every detail about an order on the sales ledger. 

Digital transformation experts like Argano recommend automating the order management system to streamline your operations, especially if you have an e-commerce site. When your order management is automated, all the departments involved to fulfill the orders are immediately notified while order details are saved and updated in the system. Because there is one source of information, this saves you the hassle of having to double-check manual entries to confirm if they’re accurate.

Order management is possibly the most crucial step because any mistake leads to issues for the subsequent steps. 

  • Credit Management 

This step entails examining a client’s financial health to gauge their risk profile and determine whether you can sell them goods or services on credit. You must do this because the last thing you want is to experience cash flow problems that can hamper smooth business operations. 

The need for credit management is especially vital for B2B sales as most are done on credit. Sales transactions made on credit allows for the invoice to be generated, sent, and paid for without affecting the fulfillment of orders. However, a proper assessment must be done to ensure that the client can pay for them, most especially if they are first-time clients.  

Having automated software that can measure the creditworthiness of a client and approve or deny their credit requests immediately not only saves you time but more importantly reduce your payment risks. 

Because the automation consolidates and centralizes the credit operations, it can boost customer service and remove any inefficiencies in the process.    

  • Order Fulfillment

This stage is where you organize and schedule the service appointment or prepare goods for shipment. The fulfillment team completes the order at the same time update the inventory. 

Having an automated inventory management software avoids situations where you accept orders that can’t be fulfilled.  This also helps you maintain a good reputation as a company and solidify your credibility.

  • Order Shipping 

This stage is where the service order is completed, or the goods are shipped to your customer. While the package can manually or automatically be prepared for shipment, automating this process is often advised. This is vital to avoid sending the order to the wrong client address. Automation also helps ensure shipment is done systematically and professionally. In addition, the shipment will be recorded by your order and inventory management system to act as a point of reference in the future. 

During order shipment, you need to work with a reliable logistics partner if you aren’t involved in the last-mile delivery to avoid issues such as goods getting lost or damaged. To ensure that these instances are prevented, you need to continuously perform an audit of the O2C process to confirm if it satisfies high-performance standards.

After your logistic partner successfully delivers the order, paperwork showing the bill of landing and proof of delivery document must be requested.    

  • Customer Invoicing System 

If the customer hadn’t already paid for the goods or service, you need to generate an invoice and send it to them. This is often the case for many B2B transactions made on credit. It’s recommended you automate this process to prevent any errors on essential data points such as; 

  • Costs 
  • Order specifics
  • Customer data 
  • Credit and payment terms 
  • Order and shipping date   

Including these data points in the invoicing system also helps ensure the invoice is sent on time with accurate information. 

  • Accounts Receivable 

After sending your customer the invoice, it’s now the turn of your accounts receivable (AR) department. These persons will be tasked with invoice generation, delivery, as well as monitoring whether clients have made payments for goods or services delivered. 

The use of automated systems is of great help for your AR team to always be on top of all invoice payments. This is because an automated system sends your clients payment reminders before the due payment date. 

Another advantage of automation is it helps in the investigation and resolving of any invoicing errors. Therefore, your accounts receivable team can reissue invoices with the correct amount in no time.

  • Payment Collection

You don’t want possible issues with your customers by asking them for outstanding balances, yet they’ve already cleared their bill. The best way to prevent this is by ensuring there are no payment collection backlogs. 

You can automate this process using an Enterprise Resource Planning (ERP) system or digital operations platform. This way, proper entry will be made once a customer completes payment. As a result, both the accounts receivable department and customers will stop receiving reminders to complete payment. Thus, preventing unwanted friction.

For customers who defaulted on payment, their accounts will be flagged and revoked access to credit for future transactions. 

  • Reporting And Data Management 

This is the final steps and needs to be done to help your company see whether changes need to be made to streamline the entire O2C process. The different metrics you need to examine include; 

  • Duration of sales cycles 
  • Customer service functions 
  • Cash flow and forecasting 
  • Vendor and customer relationships
  • Training and onboarding

Automation of the invoicing and order systems alongside these metrics come in handy as they help better manage data about your customers, orders, and sales. This way, you’ll be able to determine whether there are any particular deficiencies in the overall operation and find ways to deal with them. You must understand these metrics because it helps you make knowledgeable business decisions that improve the OTC process. This will eventually boost your company’s overall performance.   


The order to cash automation is without a doubt overwhelming, but it needs to be done if you want to stay competitive and succeed in the business landscape today. 

With automation, you can boost your operational efficiency, help you recognize possible issues right from the start, and streamline the entire business operation while maintaining your company’s core systems. Not only does it benefit your organization, but it also contributes to a more positive customer experience.