By Adriaan Kom, CCO at Visma | Onguard
In a post-pandemic economy, businesses are now rethinking their strategies as they navigate their way through this recovery period and deal with the profound changes of the last 18 months. They’ve already had to move rapidly to deploy digital and automation technologies, fast-tracking trends that would have, ordinarily, gained traction at a much slower pace. Research from McKinsey shows that many businesses have had their digital transformation journeys accelerated by as much as seven years.
With promises of high productivity and reduced costs, this shift to technology and digital innovation will persist long after the current crisis. And, with order-to-cash processes the defining part of a business’s success, using technology to innovate and improve efficiencies in this area has never been more pertinent.
In this uncertain and volatile world, companies must minimise the risks and maximise the returns from their order to cash processes. Payment delays weigh heavy on finance departments. Visma | Onguard’s latest Fintech Barometer revealed that reducing day sales outstanding (DSO) is the biggest challenge for 30% of finance professionals. Time-consuming processes, manually chasing payments and customers with cashflow issues all add to the bottleneck and create problems that can ripple across a business.
Technology can improve the complex order-to-cash cycle and there are tools available to help businesses mitigate risk, improve cash collection and manage debtors and disputes. New technologies such as artificial intelligence (AI) and machine learning (ML) are finding their way into every corner of finance. By scanning data on invoice details, emails and contracts, for example, AI can reduce the manual effort required, speeding up processes, reducing errors, and lowering costs.
However, implementation of these new technologies can be costly. They rely on ongoing development and maintenance and, when errors occur, repair bills can be prohibitive. Although the capabilities of AI and ML are extensive, they rely heavily on the data they’re given, and employees may still be needed for manual tasks to ensure the automation is working correctly.
An integral part of business strategy
To truly realise the long-term benefits of digitising the order-to-cash process, it must be part of a business’s overall vision and incorporated into a wider digital transformation plan. It’s a business strategy, not an IT strategy. But whilst the integration of the order-to-cash process is crucial for business growth and resilience, it is still one of the biggest challenges facing 33% of finance professionals that Visma | Onguard surveyed.
Cloud-based platforms can deliver seamless system integration and its adoption has grown significantly in recent times. In fact, 43% of the UK organisations that were surveyed in the Fintech Barometer were using cloud-based infrastructure, with a further 49% planning to do so in the near future.
Robust cloud-based infrastructure is both scalable and secure. It can protect your systems from unexpected and catastrophic losses. It can remove costly in-house maintenance and expertise to reduce downtime and it has low upfront costs. Cloud technologies can also maximise the use of AI and ML with off-shelf applications that can be applied quickly and easily.
Whilst many businesses believe that keeping data in-house allows for greater control, autonomy and efficiency in financial processes, it can expose them to huge risk of system failures or security breaches. However, traditional solutions like Enterprise Resource Planning (ERP) can be maintained and integrated with cloud-based applications, meaning businesses can utilise new capabilities whilst retaining existing architecture.
Crucially, the cloud is a mature technology that can reduce the burden on overstretched IT teams and conversely empower them to be more productive, giving them the freedom and capacity to contribute to wider business goals.
Introducing any technology comes with risks but the transformational benefits of flexibility, accessibility and cost-savings make cloud technology a game-changer.
The customer is king
The order-to-cash process plays a crucial role in an organisation’s relationship with their customers and their reputation depends on how they manage it. A simplified, faster order experience, fewer disputes and greater transparency can all contribute to improved customer satisfaction.
Especially in this digital era, customer expectations have risen. They demand speed, convenience and ease of use. They expect a smooth experience, from beginning to end.
Moving to an automated cloud-based order-to-cash platform improves the customer’s journey. It provides both the data and toolkit to more accurately assess if and when a customer is going to pay and helps organisations better understand customers’ needs and requirements.
For finance professionals, the optimisation of order-to-cash can improve job satisfaction; reducing mundane tasks, building capacity and contributing to innovation can all boost morale and productivity. This was highlighted by Visma | Onguard’s latest research, which highlighted that 29% of finance professions said that creating the best solution for clients was the most fun part of their work.
Digital transformation is the key to business continuity, and this means integrating digital technology into every part of a business. That must include the order-to-cash process. As the engine of every organisation, businesses must move away from outdated, legacy processes and strive for optimisation and whole-system integration. Leveraging cloud technology for order-to-cash management will help businesses take a more strategic approach to their activities, improve performance and reveal huge potential for innovation and success.
