Looking Beyond Traditional O2C Solutions: The Limits of Technology and Automation

Looking Beyond Traditional O2C Solutions: The Limits of Technology and Automation

By Eric Fay | November 19, 2020

To cope with the challenges brought upon by the pandemic, organizations are looking to free up working capital and improve cash flow.

To achieve this, companies need an Order-to-Cash (O2C) solution that can guarantee business outcomes like improved days sales outstanding (DSO), on-time payments and elimination of credit risks.

Many CFOs and Treasurers feel that this is a problem that technology and automation can help overcome, so default to looking for a newer, better piece of technology. However, technology may not be the silver bullet you think it is.

Leveraging Technology for O2C

Many organizations leverage technology because it can automate customer credit decisioning or Accounts Receivable (AR) and Treasury processes within the O2C cycle. Automation reduces or eliminates manual and paper-based processes, and the attendant cost savings and error reduction usually present a positive ROI.

Here’s an overview of the strengths and weaknesses of technological solutions to O2C.

Strengths

  • O2C technologies are evolving with innovative Artificial Intelligence (AI), Robotic Process Automation (RPA) and Machine Learning (ML) capabilities that can help mitigate risk and economize certain O2C processes
  • Technology-based O2C solutions are usually adept at collecting and analyzing receivables data to provide visibility and insights into customer behaviors
  • SaaS-based O2C solution costs are not a capital expenditure (CAPEX), unlike in-house software development. Many businesses are curtailing CAPEX expenditures in the depressed economic environment

Weaknesses

  • At a time when deployment speed is vital, implementing SaaS software within the O2C cycle can be problematic in a remote-work environment. Also, data is often stored in siloes and exists in fragmented systems which further hinders SaaS implementation
  • Protracted, complex SaaS Implementations result in an uncertain ROI that may not be understood until long after the business is committed to a long-term contractual engagement with the solution provider
  • No O2C SaaS technology can provide a guaranteed impact on DSO. Also, SaaS O2C cannot eliminate credit risk inherent in floating customer receivables
The Limits of Traditional O2C Solutions
Read the White Paper

Corcentric Managed O2C Solution

While tech solutions can bring benefits to your organization, it isn’t enough to bring your O2C operations to where you want it to be. Without providing financial management and consultative services, an automation-only cannot deliver the results that you need with the speed demanded by the current financial climate.

Meanwhile, Corcentric’s solution takes a comprehensive approach to O2C by combining technology, consultative services and financial services.

With the Corcentric solution, sellers receive customer payments on terms of their choice, and the seller is relieved of responsibility for bad debt or any credit risk. For example, if a seller engages Corcentric to reduce DSO among some, or all, customer accounts from 60 days to 30 days, the seller will immediately begin receiving those customer payments on exactly 30 day terms – guaranteed and independent of when or if the buyer remits payment to Corcentric.  Within this engagement, Corcentric would assume responsibility for assessing and extending credit for customers, distributing invoices to customers in their preferred invoicing format, and administering any dispute resolution activities.

With guaranteed, on-time payments, DSO reduction and elimination of credit risk, elimination of bad-debt , Corcentric provides sellers with complete working capital control and unlocks cash from receivables immediately for use anywhere in the business.  At Corcentric, the nexus of O2C technology, BPO services and finance represents a differentiated O2C approach capable of addressing the challenging B2B environment of today with guaranteed business outcomes no other O2C approach can achieve.

Download our whitepaper to learn more about the value of guaranteed O2C business outcomes and how Corcentric’s Managed O2C solution can help your company achieve its O2C goals.

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