Can Migrating to Digital Solve Ongoing Order-to-Cash Migraines?

Manual migraines are hamstringing the order-to-cash and source-to-pay continuum.

And the legacy headaches couldn’t have picked a worse time to stick around, what with today’s ongoing macro challenges making speed to cash and access to working capital more important than ever.

Still, order to cash is a complex journey that almost never goes according to plan — requiring savvy chief financial officers (CFOs) to innovate their processes to stay ahead of archaic and error-prone snowball effects that can scale up to a firm’s entire volume of purchase orders.

Fortunately, Corcentric President and COO Matt Clark tells PYMNTS, future-fit solutions are helping finance and procurement departments work through and around these ongoing frictions.

Even though, as he explained, future-fit solutions often help create them.

“Suppliers are left with so many different variations of how they have to transact with their customers that it’s almost become a full-time job for them to keep up with all the different levels of sophistication from fully-integrated, automated, digitized down to smaller or less sophisticated customers that still require snail-mailed invoices and paper checks and things of that nature,” Clark said.

After all, no matter how much a firm invests into its own capabilities, it needs to be able to speak the same language and seamlessly transact with the platforms and processes of its vendors, buyers and other parties across the B2B transaction.

“It becomes somewhat of a staring contest, and usually whoever has the biggest stick makes the other party conform to the way they want to do it — which is not sustainable, and causes a lot of pain and migraines for organizations,” Clark emphasizes.

Read More: New B2B Tech Reshapes Buyer-Supplier Dynamics While Unlocking Working Capital

An Order-To-Cash Overhaul

Technology alone is never a silver bullet that solves for every firm’s woes, no matter how much an organization wants it to be.

“You don’t want to boil the ocean and try to solve for everything at once,” Clark said. “Firms need to look at [transforming their existing processes] as a kind of crawl-walk-run mentality to get to where they need to go.”

He explained that there are three important pillars to any solution: the technology to optimize how information is being exchanged and how workflows are being carried out, the advisory-managed services to layer on top of that, and then flexibility from a payment timing and a payment modality perspective to tie everything together and create that win-win situation.

“Digitization is table stakes now,” he explained. “Everybody knows they have to do it, but how you go about that has become extremely important and more of the conversation.”

Clark pointed out that one fatal flaw firms make is relying on their enterprise resource planning (ERP) systems as the core functionality atop which they build distribution and processing remittance advice for payments that are coming in. The danger is that ERP systems tend to exist wholly within an organization’s four walls and rarely consider the types of connectivity needed with the outside world and B2B partners.

Companies need to identify pain points for themselves and their customers, then partner with someone who can guide them at the right pace to improve the order-to-cash process.

“The next evolution is companies realizing that they don’t have to do this themselves with their own resources,” he said. “People need to stop looking at their order-to-cash or AR (accounts receivable) processes as a necessary evil to suffer through and realize that there’s an opportunity to offload some of this stuff by introducing a third party that can streamline everything, not just for them but for their customers, too.”

See also: The Trickledown Consumerization of B2B Payments Helps Firms Win Business

The Future of B2B Is a Low-Touch, Efficient Transaction Process

After all, customers are starting to realize that enduring friction points along the business relationship and B2B transaction journey aren’t necessarily worth putting up with — especially in an evolving landscape full of other suppliers who are providing more seamless engagements.

“Good pricing is worthless if you’re spending a ton of time and energy on the back end dealing with exceptions and frustration around how transactions are being processed,” Clark said.

That’s because upgrading any process needs to deliver real business results to be worthwhile, and the ultimate scorecard for the effectiveness of a company’s order-to-cash capabilities is its impact on their day sales outstanding (DSO) performance, exception rates and overall labor efficiencies.

Additionally, Clark emphasized that “data is the key to everything … data is the foundation for a lot of things that allow companies to get to that next level of maturity.”

He explained that being able to pull real-time insights and data analysis from formerly fragmented processes can help firms shift from a reactive mindset to a proactive, more agile approach.

As for what the Corcentric COO sees the future holding?

“You don’t have to look much further than B2C today for the future of B2B tomorrow, when it comes to things like efficiency and digitization. Some of the newer generations rising up in organizations just won’t accept some of the things that have been taken for granted as status quo for decades — they’ll say this is too difficult, this needs to change,” he said.