How Sales Order Automation Can Improve Your Order-to-Cash Cycle

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In this age of technology, the pace of business moves faster than ever. Customers have high demands, expecting more with less and in much shorter time periods. Today, innovation and optimization of business processes are vital to a company’s longevity and long-term success. Faced with an intense pressure to innovate in order to remain competitive and draw in customers, manufacturers and distributors are constantly searching for new ways to improve efficiency. One approach is to find ways to automate key business processes and accelerate order-to-cash cycles.

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Currently, many companies still process customer purchase orders by hand. This procedure involves compiling the orders as they come in and manually processing each one individually, re-entering the data into the company’s ERP system as a sales order. In addition to being slow, laborious and an inefficient use of staff time, this process is expensive and prone to data entry errors. Eliminating manual entry through automating the order-to-cash cycle is an important step towards true efficiency. Not only does it reduce operational costs and increase customer satisfaction, but it also enhances a company’s profitability. With faster order-to-cash cycles, a company can better manage their cash flow and make capital available to reinvest.

The Difficulty of Eliminating Manual Order Processing

With the benefits offered by eliminating manual order processing and automating the order-to-cash cycle, why is it that most companies have yet to do it?

The answer is simple. In order to implement automation, customer orders have to arrive in a standard format to be automatically translated into a sales order in the manufacturer or distributor’s ERP system. While solutions, such as Electronic Data Interchange (EDI), offer this, they require considerable time, money and a high level of collaboration with customers to execute.

Unfortunately, many of these customers have neither the technical resources nor the desire to help implement these solutions in their business communications. Most have their own unique internal process to go through, be it mail, email or fax. They are therefore reluctant to duplicate effort by entering the same order a second time in a shopping cart or web form for the supplier. Thus, if the manufacturers and distributors want to retain their customer base, asking these customers to change the way they do business is not acceptable.

With hundreds of orders arriving daily in different formats to be processed, what is needed is a means to bridge this gap between customer convenience and the supplier need to optimize and accelerate order-to cash cycles – a sales order automation solution.

The Power of Sales Order Automation Solutions

Sales order automation solutions can now bridge this awkward gap between each customer’s unique purchase order requirements and the increasing need for automation to accelerate processes. They allow companies to treat email, fax and print orders like standard electronic documents, capturing data from them with 100 percent accuracy. By implementing these solutions, error-prone manual entry is no longer necessary, eliminating its detrimental effect on customer care and order-to-cash cycles. Ultimately, these solutions allow companies to optimize and accelerate their sales order cycles accurately and without the need to inconvenience or change the way their customers do business.

Shop Tools is one such company. As the largest independent distributor of industrial supplies for manufacturers and machining companies in the Colorado area, the volume of orders they receive is huge. In order to ensure their vending machines remained appropriately stocked, customer service staff had to follow a complex manual order process. Remotely accessing the machines, they pulled the stock data and compiled long reports, often more than 50 pages in length. These reports were then used twice, first to manually input the order data into the ERP system and secondly to input the same data for invoicing. With orders containing up to 300 different part numbers, this repetitive manual order entry was not only predictably slow and impractical for staff, but also led to an increased chance for human error at every stage. Unable to change how they received orders, mistakes were inevitably made which cost Shop Tools significant sums of money to resolve, putting pressure on their staff, taking up time and risking their excellent reputation for customer service.

HalversonA sales order automation solution proved to be the ideal answer to their problem. Receiving data regarding stock numbers directly from the vending machines, it automatically translated it into sales orders in their existing ERP system with 100 percent accuracy. This eliminated their error-prone manual order processing, providing customers with what they needed when they needed it, while allowing customer service staff to refocus their energy onto more important tasks.

Ultimately, sales automation solutions can make the dream of automating and accelerating order-to-cash cycles a reality. Using them, companies can move from customer order to invoice to payment more rapidly and efficiently, satisfying their customers and increasing their profitability.

Brent Halverson is President and CEO of ecmarket.

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