Best-in-class Corporations Automating the O2C Cycle, According to Survey
Corporations are improving the management of working capital by introducing increased controls and visibility of the order-to-cash (O2C) cycle, reveals survey by the Aberdeen Group in collaboration with SunGard. The report, entitled “The Order-to-Cash Cycle: Enhancing Performance with Process Automation”, investigates the actions taken by global companies to effectively convert their accounts receivables assets into cash.
Aberdeen surveyed 140 participants from organisations around the world for the study. Within this group, Aberdeen defined best-in-class corporations as having 71% lower past due accounts receivables (A/R); 80% faster payment clearing times; and 70% lower invoice volumes requiring manual intervention – when compared to corporations that are not best-in-class. Aberdeen attributes this trend in part to best-in-class corporations being 2.9 times as likely to automate major steps of the O2C cycle when compared to all other corporations. Organisations can help minimise labour costs, reduce days sales outstanding (DSO) and foster process efficiencies by introducing strategic workflow, and intuitive functionality for routing disputed transactions.
Scott Pezza, senior associate at Aberdeen Group, said: “Although the economic environment has shown signs of recovery, the focus on reducing operational costs remains at the forefront of most corporations’ agendas. In fact, the majority of survey participants at 67% reported reducing overall cost as the major pressure steering improvements in the order-to-cash cycle. Inflated costs related to manual and inefficient processes continue to play a large part in draining cash. As a result, more best-in-class organisations are automating processes surrounding the order-to-cash cycle, which is helping them to successfully drive these costs downward.”