EXPLORE what we know and do
EXPLORE what we know and do


Competence areas

Contact me

* First Name:
* Last Name:
Phone number:
* Email:
* Message:
Successfully sent!
Could not send the mail, try again later!
COFFEE OR TEA? Drop by for a cup.

Blog November 27, 2015

1 Order to cash – Do you know how many integrations this process includes?

Continuing from my previous blog post, this time I will focus on a “wall-to-wall” process that is perhaps the most important to an organization’s vitality – order to cash. This is the function that generates the topmost row on the income statement i.e. revenue. The smoothness of this process also has a major impact on the turnover of receivables and, thereby, on the working capital tied up in running a company. I will talk about other items with an effect on turnover in my upcoming blog posts. You should also bear in mind that the order-to-cash process tends to be the most expensive function in a company. Transactions that eventually lead to a company sending an invoice can make their way through a surprisingly large number of parallel systems. This means that invoicing data is collected from a number of sources at the end of the month. Some systems have been automatically integrated to talk to each other, but certain transactions may need to be retrieved manually for invoicing purposes. When invoicing is carried out on only a few days of the month, the financial administration is bound to become overloaded. This leads to an increased risk of process leaks, with some transactions never ending up on an invoice or only being noticed months afterwards. Performing a comprehensive inventory of applications or having a partner do so is one of the cornerstones of planning or redesigning a process. Such an inventory should include an in-depth analysis of integration with other systems.

In general, we can say that the following steps of the order-to-cash process can be found in the operations of every organization in one way or another: Customer acquisition results in making and storing an agreement. Transactions to be invoiced are processed and allocated to the correct agreement. The transactions are then invoiced, recorded in accounts receivable, and collected in the event of an outstanding invoice. The material sent to the customer is also filed in order to create a comprehensive audit trail. These functions are guided by the management’s instructions and regulations governing the terms of customer account creation and credit policy.

2 The seed for success is planted early

As with all processes covering many organizational units, the following applies to the order-to-cash process: complying with the agreed guidelines systematically and rigorously from the beginning also enables success at later stages. The overall process has an impact on the service provided to a new customer. The customer’s experience of the service is greatly influenced by how items affecting the invoice content are collected, how transactions are listed on the invoice, and how payment is organized. It should be noted that rigorousness in this case does not mean that sales flexibility is replaced by inflexibility; instead, it means providing a better customer experience. With the right systems and well-managed integration, it is possible to improve customer satisfaction quickly.

3 Creating a better, digital tomorrow

A common problem in mid-sized businesses in particular is that they have multiple systems, problems with integration management, and no common data model. These problems can be solved when business people involve the IT department in the design of the system environment – from a joint, business-driven approach. Another sore spot related to the quality of source data is more about process management and the way in which an organization conducts its business. These challenges can be prevented by setting up a system that requires certain basic information to be entered every time. However, people have the tendency to take the path of least resistance and minimize their workload. For this reason, it is crucial to create financial administration processes that make saving the required information easy.

4 The keys to the solution

One solution to a leaking order-to-cash process, its further development, planning, and design is naming a process owner. This person must aim towards development, understand internal processes and their impact on customers, and have enough authority within the organization to make decisions on the entire process, regardless of what part of the chain is affected. Distributing responsibilities is the first step, with the actual work only beginning after that. Describing and understanding the current situation, mapping out stakeholders, and establishing intent are the first key tasks on the process owner’s list. Process descriptions and collecting information on the existing application and integration environment form part of describing the current situation. With regard to stakeholders, it is essential that all parties involved in the company’s order-to-cash process be identified. The intent should be an open-minded vision of the direction in which the process should be taken and of the form it should take. Measurements help in charting progress and setting targets. This is the beginning of development toward the most trouble-free and automatic multi-channel invoicing possible.

Are you aware of the current status of your organization’s order-to-cash process? When did you last go through your organization’s application assets and integration? Do you know how much money is tied up in databases or transfers? If you are interested in hearing more, get in touch and we’ll look into how we can help you to improve the turnover of your receivables.

Ville Räsänen

The author works for Enfo in Financial Process Services in the areas of management consulting and project operations. With seven years of service at Enfo, Ville has expertise in financial administration consulting for a number of industries, and the in-depth understanding of information systems related to financial processes.