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Order To Cash SpecificsMaintain Customer and Pricing Information                      Process               Fulfill       ...
Order To Cash SpecificsMaintain Customer and Pricing Information                         Process                Fulfill   ...
Order To Cash SpecificsMaintain Customer and Pricing Information                      Process               Fulfill       ...
Order To Cash SpecificsMaintain Customer and Pricing Information                      Process                Fulfill      ...
Order To Cash SpecificsMaintain Customer and Pricing Information                      Process               Fulfill       ...
Order To Cash SpecificsMaintain Customer and Pricing Information                        Process                    Fulfill...
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Order To Cash Process Improvement Map

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Too many companies face process issues when customers refuse to pay the entire invoice amount on time. This issue is an indication of fundamental process problems within the order to cash cycle. Take a look at the functional areas and find all the problem areas. Use a systematic approach, like Lean or six sigma methodologies and tools, to overcome these obstacles. Ask for help if you need it.

Published in: Business
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  • Thanks for the information, I, too am working on an O2C process and I would like to use your presentation with your references in my work with a current client. I would be grateful if you could share the presentation with me?
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  • Thanks for this excelent Information, I am working in O2C process, and I need your autorization for use it as reference in my personal work, and I will be very grateful if you Could share the "Fulfill order" part
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Order To Cash Process Improvement Map

  1. 1. Order To Cash SpecificsMaintain Customer and Pricing Information Process Fulfill Invoice Receive and Manage CreditQuote Order Order Order Customer Apply Cash and Collections Maintain Customer and Pricing Information: The process to maintain customer listings and product pricing practices and data. Activities Representative Best Practices Representative Benchmarks * • Establish and update customer • Centralized customer and pricing • ERP utilization: 43% of companies take full information databases advantage and fully integrate order • Establish and update pricing and • Single customer number for common management, procurement, planning, promotion pricing tables and rules customers in multiple systems production and finance • Customer hierarchy 70% of all companies utilize ERP • Discount policy enforcement: prevent • Customer partitioning for customer overrides. information coded into groups of related • Integrate across all systems/ERP Customers to increase locality of references within each sub-group • Pricing is not haphazard, random or variable: 5% or less surprises / unexpected results * Update required
  2. 2. Order To Cash SpecificsMaintain Customer and Pricing Information Process Fulfill Invoice Receive and Manage CreditQuote Order Order Order Customer Apply Cash and Collections Quote Order: The process to create, confirm and control quotes and to ensure that customer quotes are accurate and profitable. Activities Representative Best Practices Representative Benchmarks * • Determine/confirm customer product • Automated expert configurator for • Automated conversion from quote to features and delivery requirements assemble, build, configure and engineer order: • Determine resources - engineering, to order quotes Best 38% material, equipment, equipment • Online self service quotes All Others 22% availability and utilization, labor, field • Automatic workflow routing for approvals • Win/loss ratio services, etc. – and associated costs • Blind testing – understand the customer required to fulfill quote request experience • Quote time: • Sales force is knowledgeable of sales Reduced by factor of 30 quote and status • Percentage of incomplete orders: • Centralized quotation database 20% reduction • Engineering support: 20% to 50% reduction * Update required
  3. 3. Order To Cash SpecificsMaintain Customer and Pricing Information Process Fulfill Invoice Receive and Manage CreditQuote Order Order Order Customer Apply Cash and Collections Process Order: The processing of an order from time of acceptance to shipping. Activities Representative Best Practices Representative Benchmarks * • Determine/confirm customer order • Guided selling • Perfect Order performance: product and delivery requirements • Up and cross selling Top 98% • Determine product availability • Targeted promotions Bottom 78% • Enter orders into system • Price and discount enforcement • Total cost to enter/track/process an order • Determine logistics and transportation • Online catalogs with customer specific by sales order: • Process backorders negotiated pricing Top $ 5.63 • Handle order inquiries • Workflow approval of special pricing Bottom $166.45 • Process claims, returns, rebates, • Online placement of order by customer • Average hours from sales order receipt to warranties • Electronic acceptance of order manufacturing/logistics: • Real time availability to ship or promise Top 1 • Integrated credit approval Bottom 24 • Integrated with other systems/ERP • Number of sales orders per order process FTE: Top: 6,550 Bottom: 597 * Update required
  4. 4. Order To Cash SpecificsMaintain Customer and Pricing Information Process Fulfill Invoice Receive and Manage CreditQuote Order Order Order Customer Apply Cash and Collections Invoice Customer: The process of generating billing data and providing to customers. Activities Representative Best Practices Representative Benchmarks * • Prepare customer invoices • Centralize to a shared service • Percent of invoices with errors: • Send invoices to customers environment Top 1% • Process adjustments and/or special • Standard invoice terms and conditions All Others 4% billings • Integrated with other systems/ERP • Total cost to invoice customer per • Process credit memos, refunds, rebates, • Same day invoicing invoiced processed: etc. • Electronic transmission of invoice to Top $0.45 • Record (post) sales and receivables customer Bottom $4.04 • Make/verify needed journal entries • Automated invoicing for recurring • Number of invoices processed per • Respond to billing inquiries transactions Invoicing FTE: • Online account information for customers Top 103,659 Bottom 11,385 • Percent of invoices sent electronically: World Class 21% Peer Group 8% * Update required
  5. 5. Order To Cash SpecificsMaintain Customer and Pricing Information Process Fulfill Invoice Receive and Manage CreditQuote Order Order Order Customer Apply Cash and Collections Receive and Apply Cash: The process of collecting customer payments, recording against balances due, resolving differences. Activities Representative Best Practices Representative Benchmarks * • Receive and apply remittances to • Centralize to a shared service • Total cost to process accounts receivable customer accounts environment per customer receipt: • Investigate unapplied receipts • Receive remittances to lockboxes, with Top $ 0.79 • Analyze, reconcile and resolve electronic link to financial institution Bottom $22.85 deductions/short pays which provides needed level of detail for • Number of receipts processed per • Forward cash received to bank application accounts receivable FTE: • Respond to customer inquiries about • Automatic application of remittances to Top 45,760 payments received accounts Bottom 5,208 • Post activity to the ledger • Automatic write off of shortfalls within • Cost to process accounts receivable per • Reconcile subledger to ledger predetermined thresholds $1000 of revenue: • Determine proper reserve for doubtful • Automated workflow for exception Shared Service $0.13 accounts approval and problem resolution Self Support $0.33 • Forecast cash flow from receivables • Electronic imaging for document storage • Cycle time to resolve adjustments on • Integrated with other systems/ERP customer accounts: Best 5 days Bottom 45 days * Update required
  6. 6. Order To Cash SpecificsMaintain Customer and Pricing Information Process Fulfill Invoice Receive and Manage CreditQuote Order Order Order Customer Apply Cash and Collections Manage Credit & Collections: The process of establishing credit, monitoring non-payment exposure and collecting out-of-terms payments. Activities Representative Best Practices Representative Benchmarks * • Establish credit and collection policies and • Centralize to a shared service • Percent of credit sales collected within procedures environment terms: • Establish and update customer credit • Set up automatic payments with World Class 82% levels customers with payment made Peer Group 75% • Place/release holds on pending shipments electronically or by debiting customer • Average DSO: due to credit issues accounts Top 25 • Track payments due • Assignment of specific customer accounts Bottom 53 • Analyze delinquent balances to sales and collection coordinators • Total cost to manage and process • Monitor customer payment history • Automate review and update of customer collections: • Prioritize and initiate collection activities credit based on pre-defined triggers Top $0.08 • Resolve disputes • Accelerated collection process Peer Group $0.83 • Process adjustments/write off balances • Automate identification of customers to • Orders are credit checked and released be called, based on predefined, cost within 1 to 2 days: effective criteria. Best 60% • Integrated with other systems/ERP Laggards 36% * Update required

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