Payments Innovation

How Order To Cash Eases Cash Flow Woes

online business payments

Paper — it’s like the nightmare we can’t wake up from. In 2019, 42 percent of B2B invoices were paid by paper check. Add to that image, this one: PYMNTS research finds that nearly 44 percent of invoices are still sent by fax machine and over 72 percent arrive via USPS.

In America’s $2.4 trillion manufacturing sector, outmoded invoicing and poorly managed payments have created familiar problems of cost/time overruns, bookkeeping errors and the mayhem of inefficiency. In our most recent “Innovating Order-to-Cash Playbook” we size up the climate and terrain for manufacturers as payments enter the age of “instant.”

Late Again

There’s a quiet crisis in American manufacturing, and no, for once it’s not China. Actually, late payments are the culprit. We build skyscrapers, spaceships and submarines that boggle the mind, but 90 percent of all U.S. manufacturers report having been paid late by customers in the past year. There is relief in the form of digital Order-to-Cash (O2C) systems that remove friction and move money faster between parties. A digital O2C system may also incorporate a Credit-as-a-Service (CaaS) function, which is another way to get some of what you’re owed now, because even Exxon needs access to operating cash.

Also, ponderous onboarding and credit approval protocols can sour the sweetest deals before they ever get done. Frustration is too weak a word to describe needing working capital and not having access to it. That’s made worse when economic conditions are favorable as they have been, because it feels like you’re leaving money on the table somehow.

O2C is an excellent option for trading partners that transact often. By integrating with customer relationship management (CRM) and accounts receivable (AR) systems, the companies get a deeper, more revealing view of payments data and status while a good deal of friction is removed from payments. And with CaaS factored in you get things like auto decisioning on credit lines, with real-time application review and a decision in under 30 seconds for credit lines up to $250,000. A slew of helpful integrations and purchase controls for role-based access also become possible with this approach.

Unlocking the Lockbox

O2C is just a stop along the way to DTC (Direct-to-Consumer) where even greater efficiency is hinted at. But while things have improved for America’s manufacturers in recent years, negative cash flow is a constant drain on operations. With accounting automation and APIs that work with enterprise resource planning (ERM) and CRM systems, business can speed up the entire process … and get paid.

Software solutions that integrate with payment portals can manage cash flows easily. When two frequent trading partners use the same payments platform things get exponentially easier, as data can be exchanged and automated to clear up invoices and refresh the ledger.

Credit-as-a-Service can then be extended between buyer and seller once in a secure system where automated flows also correct the most egregious data roadblocks, pass account data to the CRM, performance data to the ERM, and get money flowing more easily.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.