14 Clues your Order to Cash Cycle is Broken

The order to cash cycle spans your entire business; it involves resources from marketing, sales, accounting, inventory, manufacturing, distribution, supply chain, logistics, and customer service. Due to the complex nature of the order to cash process and the complexity of transferring information from one department to the next. With so many departments and people involved, there are a huge number of places where your process can get stuck or slow down. How do you know you’re having order to cash cycle problems? There are usually a few telltale signs.

Signs of a Broken Order to Cash Cycle

  • Rogue sales practices and processes as well as unapproved discounts and deductions.
  • Credit management problems such as unapproved credit extensions and customers exceeding credit limits.
  • Incorrect quotes
  • High order-taking errors that result in inaccurate sales orders.
  • High levels of billing errors and time spent reviewing/correcting them
  • High order fulfillment error rates
  • High error rate on order fulfillment- late shipments, incomplete shipments, etc.
  • Inefficient/ineffective collection processes made evident by high days sales outstanding and increased bad debt write-offs, a need for invoice factoring, legal action, etc.
  • High levels of invoice disputes
  • High cost of dispute resolution
  • High levels of customer complaints and inquiries
  • Longer than average call times to manage customer inquiries
  • Significant amount of time spent on rework and data re-entry throughout different processes
  • Long term loss of customers due to frustrating billing/payment processes or poorly managed sales processes.

Do any of these sound familiar? Once you have identified your particular issues, there are many simple things you can do that will make a surprisingly large impact on your overall order to cash performance, such as implementing automation tools to increase efficiencies and reduce human error. For example, if your proves is broken in the order processing step due to discounting processes, implement a sales order management solution that can automatically apply customer specific discounts to avoid quote errors. If invoicing is slowing you down, get rid of paper invoicing processes with automated invoicing and online bill pay options. These are only a few of the modern tools and tactics you can use to speed up order to cash, improve the customer experience, and get your orders turned into cash faster. Visit our Resource Center for more detailed tips and tricks!

If you’re seeing signs of A/R problems, such as high DSO, increased bad debt levels, or high levels of disputes and costly resolution processes, sign up for the webinar below and learn how to fix it with advice from A/R expert, Michelle Dunn.

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