Advanced technologies, including AI, Analytics, and Big Data Management, can deliver integrated order to cash automation (O2C automation) across even global enterprises, providing efficiency and real-time unified visibility, improving cash flow for better working capital management, and enhancing customer experience.
CFOs are intensely focused on working capital and know cash is tied up in their accounts receivables and order-to-cash process. The pandemic may have renewed the intensity of focus on cash management, but CFOs have been here before, whether in macro or micro crises.
CFOs need to free cash from inefficient order-to-cash (O2C) processes to pay down debt, invest in product development, or finance strategic initiatives. At the same time, competitive pressures demand enterprises give their customers a better experience.
Enterprises have long sought to automate and integrate O2C for greater efficiency and fewer errors, improving DSO and AR turnover. They have gained improvements through the automation of discrete functions. But structural and ERP system shortcomings have prevented O2C integration, and the limited automated processes have continued to require a significant level of human involvement.
What is Order to Cash (O2C) Automation?
Order to Cash, or O2C, is a process involving various steps—such as order placement, credit management, order fulfillment, shipping, customer invoicing, payment collection, and reconciliation—in the sales cycle. A typical O2C process starts when a supplier receives an order for goods or services from a customer.
Order to Cash automation accelerates various steps involved in the O2C cycle using AI, RPA, machine learning, and other intelligent technologies. Automating the order-to-cash process eliminates manual processes by up to 90%, frees up staff for higher value-adding tasks, reduces DSO, and improves cash flow. Order to cash process automation helps businesses onboard customers faster, improve revenue and profits, and optimize their invoice to cash automation.
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Integrated O2C Automation Replaces Automated AR
Gartner reports that demand for a single, integrated O2C process is replacing demand for AR automation. Integrated O2C platforms combine order to cash solutions with cross-process digital capabilities to offer “hyper automation,” which provides much greater efficiency, visibility, and analytics that drive actions. Such platforms also enable increasingly personal and collaborative customer experiences.
The combination of APIs, automation, AI, analytics, and digital assistants has made such holistic order to cash automation software possible. Gartner identifies Emagia as one of the providers of the new order-to-cash solutions.
Eliminate Gaps, Elevate Customer Experience
The technologies in these systems include artificial intelligence (AI), robotic process automation, analytics, cloud, and big data management. Joining these technologies in a comprehensive O2C platform enables enterprises to eliminate the gaps between the discrete automated functions and overcome the shortcomings of ERP systems.
The relatively new “hyper-automated” O2C platforms like Emagia solve the issues of fragmentation of vast amounts of data and processes, connecting end-to-end processes with information. They also provide real-time reporting and data visualizations.
Crucially, the consequence of these technologies is to enable the enterprise to provide a superior customer experience. As Gartner points out, customer experience is vital to business success in the 2020s.
Challenges of O2C Integration: A Vast Sea of Data
One of the challenges in automating an integrated O2C process is the vast amount of data. Large enterprises generally have multiple ERPs or, at the very least, different versions of the same ERP. Their incompatibility is a significant problem, but it’s only the beginning.
The O2C process is information intensive. In addition to financial data from ERPs, there are essential information flows from multiple other sources. These include in-house systems such as email, CRMs, and order entry, networks like Ariba, banks and bank lockboxes, credit bureaus and government websites, and customer portals.
Order to Cash Automation Platform Eliminates the Gaps
With so many sources and systems, companies have had to overcome information and process gaps manually. Manual tasks are slow, monotonous, and error-prone. However, intelligent APIs and robotic process automation now automate information gathering from diverse sources and systems.
Once gathered, the information must be accessible across O2C applications. Companies need a single global view of all receivables. Order to cash automation software providers like Emagia accomplish this through advanced big data management.
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For example, Emagia gathers structured and unstructured data into a single finance data lake for operational storage. Its analytics and a full suite of enterprise order to cash automation software sit on top and operate from this data source.
O2C Fragmentation Replaced by Consolidation, Coordination
Data feeds consolidate the data from disparate ERPs in the data lake, along with data gathered by APIs from other sources essential to credit approval, collections, and cash application. Formerly, discrete functions necessarily meant a fragmented process. But with data in a single operational data store, automation applications are coordinated, and through AI enhancement, do more with reduced human involvement.
Because information is no longer isolated and applications are integrated, the left hands of credit or collections can know what the right hand of cash application is doing in real time. And real-time reporting with visualizations, whether enterprise-wide or by region or business unit, keeps executives and staff abreast of statuses even as analytics propose the next steps.
The end-to-end O2C process is finally integrated. This allows a unified view of the organization’s AR and cash flow.
Intelligent Technologies Are the Key
Cognitive data capture, robotic process automation, and machine learning replace several manual tasks from data gathering to processing. Accuracy and efficiency improve automatically through AI-based machine learning. Advanced analytics report, predict, and prescribe actions, enabling full-picture, data-driven decision making.
Digital assistants support the O2C applications. For example, Emagia’s AI digital assistant “Gia” understands and executes more than 100 O2C tasks. While very supportive of internal personnel, Gia is a particularly effective interface supporting customer self-service. Gia prompts customers, answers questions, and guides them to payment.
A Change in Human Involvement
Comprehensive, integrated automation markedly reduces the requirement for human involvement in traditional “work” such as repetitive information gathering, organizing, and reporting. Instead, humans can move to problem-solving and higher-order tasks.
Benefits of Overcoming O2C Automation Challenges
Integrated and hyper automated O2C platforms demonstrate such results as:
- Credit decisions in minutes and seconds rather than days or weeks
- Current AR of 85 percent or better
- Deduction processing in less than a week
- 85 percent or higher cash auto match
- Insights through visualizations and reporting
- 30+ percent reduction in DSO
- 40+ percent reduction in operations cost
- Customers experience high touch, high accuracy, and 24 X 7 X 365 digital assistance
Advanced automation technology provides cash forecasting and improves cash flow to support working capital management. With a stronger cash position and better forecasting, CFOs can manage debt, invest in product development, and finance initiatives.
From Process to Insight and Strategy
True O2C automation is here. The outcomes of an integrated and automated O2C process indicate the overall direction of finance work in general, which is away from managing process toward monitoring process, providing insights, and business strategizing. In addition, reporting will shift to real time, eventually eliminating the close processes. And efficiency gains will enable finance to shift its focus to the demands of enhanced customer experience and creating strategies for growth.
For more on how Emagia’s O2C Automation Platform can move your enterprise forward, contact us.
End-to-End Order to Cash Process Flow
The order to cash process flow represents a complete end-to-end workflow that ensures timely processing of customer orders, invoicing, cash collection, and reconciliation. This workflow is central to invoice to cash automation and overall working capital efficiency. Optimizing this flow helps enterprises accelerate cash cycles, reduce errors, and enhance customer satisfaction.
Order to Cash Process Steps
- Order capture and validation – ensuring accurate customer orders.
- Credit assessment and approval – automated checks to mitigate risk.
- Order fulfillment and shipping – integration with logistics for timely delivery.
- Customer invoicing and distribution – automated invoicing for faster processing.
- Payment receipt and cash apps process – applying cash efficiently and accurately.
- Dispute and deduction handling – intelligent exception resolution using AI.
- Reconciliation and reporting – real-time visibility of receivables and cash flow.
Order to Cash Automation Software & Solutions
Modern order to cash software leverages AI, RPA, and machine learning to streamline operations, reduce errors, and accelerate cash flow. By automating the O2C cycle, businesses can achieve:
- Touchless payment processing to accelerate cash collection
- Automated deduction and dispute management
- Integrated reporting and order to cash analytics for informed decisions
- Real-time visibility across the order to cash process flow
Learn more about Emagia O2C automation software and how it can optimize your order to cash process automation.
Invoice to Cash & Cash Application
Efficient invoice to cash is a critical component of order to cash automation software. The cash application process cycle automatically matches payments to invoices, improving DSO and freeing up working capital. Emagia’s AI-powered cash application solutions handle multiple payment types, formats, and currencies seamlessly.
Order to Cash Metrics, KPIs, and Analytics
- Reduction in Days Sales Outstanding (DSO) and cash cycle time
- Percentage of automated cash apps process
- Time to resolve disputes and deductions
- Operational cost savings and efficiency gains
- Real-time visibility of AR balances, collections, and liquidity
- Customer satisfaction and response times
Challenges and Best Practices in O2C Automation
Enterprises often face challenges such as data fragmentation, cross-ERP incompatibility, manual exceptions, and complex remittance formats. To overcome these, best practices include:
- Implementing integrated O2C automation software platforms for end-to-end coverage
- Leveraging AI for intelligent matching, exception handling, and predictive analytics
- Consolidating financial and operational data into a single operational data store
- Using dashboards and analytics for proactive, real-time decision-making
- Aligning order to cash processes with customer experience objectives
Future Trends in Order to Cash Automation
The order to cash automation market size 2024 is projected to grow significantly as enterprises adopt:
- Autonomous cash application and exception resolution using AI
- Predictive cash forecasting with advanced analytics
- End-to-end visibility across the O2C cycle for global enterprises
- Cloud-native, integrated order to cash solutions for scalability and collaboration
- AI-driven recommendations to optimize working capital and reduce DSO
How Emagia Helps with Order to Cash Automation
Emagia provides a fully integrated order to cash automation platform that combines AI, machine learning, RPA, and advanced analytics. Key capabilities include:
- End-to-end O2C process automation from order capture to cash application
- Automated exception handling, dispute, and deduction management
- Real-time dashboards for AR, DSO, and cash flow insights
- AI-powered digital assistant “Gia” for internal and customer self-service
- Seamless integration with ERP, CRM, and banking systems
With Emagia, enterprises gain accelerated cash cycles, improved order to cash accounting, and enhanced customer experience while freeing staff for strategic work. Learn more about Emagia O2C solutions and Gia digital assistant.
Frequently Asked Questions (FAQs) about Order to Cash Automation
What is order to cash automation?
Order to cash automation is the use of AI, RPA, and analytics to streamline and integrate all steps of the O2C cycle—from order placement, credit management, and fulfillment to invoicing, cash application, and reconciliation—reducing errors and accelerating cash flow.
Why is order to cash process automation important?
Order to cash process automation increases efficiency, shortens cycle times, reduces Days Sales Outstanding (DSO), improves working capital, and enhances the customer experience by minimizing manual tasks and enabling real-time insights.
What are the main steps in the order to cash process?
The end-to-end O2C process includes: order capture and validation, credit assessment, order fulfillment, invoicing, payment collection, cash application, deduction and dispute management, and reconciliation. Automation ensures smooth execution of each step.
What are the benefits of using order to cash software?
Order to cash software delivers faster cash collection, improved AR accuracy, automated exception handling, actionable analytics, reduced operational costs, and enhanced customer satisfaction.
Can O2C automation software integrate with existing ERP and CRM systems?
Yes. Modern O2C automation platforms integrate seamlessly with ERP, CRM, banking systems, and other enterprise applications, enabling a single, unified view of receivables and cash flow across the organization.
How does AI improve the order to cash process?
AI enhances O2C automation by automating cash application, predicting and resolving exceptions, extracting remittance data from multiple formats, and providing insights for better decision-making, reducing manual intervention significantly.
What is the role of RPA in order to cash automation?
Robotic Process Automation (RPA) automates repetitive, rule-based tasks such as invoice processing, data entry, and payment reconciliation, freeing staff to focus on exception handling and strategic activities.
What are common challenges in the O2C cycle?
Challenges include fragmented ERP systems, inconsistent data sources, delayed cash application, manual deduction and dispute management, cross-currency complexities, and lack of real-time visibility. Integrated O2C platforms solve these challenges through automation and AI.
How does order to cash automation impact working capital?
By speeding up cash collection, improving AR accuracy, and reducing DSO, O2C automation increases available cash, strengthens liquidity, and allows CFOs to reinvest in strategic initiatives.
What makes Emagia a leading order to cash automation solution?
Emagia provides a fully integrated O2C platform with AI-powered cash application, digital assistant support, advanced analytics, and seamless integration with ERP and banking systems, enabling faster cash flow, improved AR efficiency, and enhanced customer experience.
Can order to cash automation handle multi-currency and global operations?
Yes. Advanced O2C automation platforms manage multi-currency transactions, global receivables, and international remittance formats, ensuring consistent and efficient cash collection across regions.
What is the difference between invoice to cash and order to cash automation?
Invoice to cash focuses primarily on invoicing, payment receipt, and cash application. Order to cash automation encompasses the entire sales-to-cash process, including order capture, credit management, fulfillment, invoicing, payment, cash application, and reconciliation.
How can businesses measure the success of O2C automation?
Key metrics include reduction in DSO, percentage of automated cash application, dispute and deduction resolution time, operational cost savings, AR accuracy, and improved customer satisfaction.
