How To Optimize Your Order-To-Cash (O2C) Cycle

An order-to-cash cycle is the bread and butter of your business. It helps create loyal customers and build customer relationships. A fast order-to-cash cycle guarantees customers are served faster, making them more likely to return. We’ll review everything you need to know, including what an order-to-cash cycle is and how to optimize one.

An order-to-cash cycle is a business term that describes the entire ordering process from when a customer orders until the company receives money. Many businesses also include revenue recognition, customer payments, sending out invoices, and other financial matters in the order-to-cash cycle.

Most businesses keep detailed documentation that shows the entire order-to-cash cycle and how long each step in the process takes. Then, each step is carefully analyzed, showing companies areas that can be optimized. When we discuss optimizing the order-to-cash cycle, it means speeding up the entire process.

Ensuring that as many steps in the order-to-cash cycle are automated is the easiest way to optimize your O2C cycle. An automated ordering system will ensure that orders are instantly sent to fulfillment centers. For example, if your business is located in the East but you have a fulfillment center in the Midwest, it’s critical to get the information to your fulfillment center as quickly as possible. Software is also available to automate credit management, update inventory, send automatic invoices, and more. Utilizing automated software is critical to optimizing your O2C cycle.

Having automated systems in place will optimize your order-to-cash cycle, but keeping accurate records of all the data in the automated systems is also essential. Then, set aside monthly time to review the data. This can help businesses learn where they can optimize the O2C cycle.

A 3PL company provides several services to businesses that they work with. They may offer companies storage, distribution, transportation, and order fulfillment services. Working with a shoddy 3PL company can instantly make the entire cycle slower. This is often the slowest part of the order-to-cash cycle. Take the time to research, and then work with a 3PL with a proven track record.

A 3PL company can make or break your business. At B&C Logistics, we strive for excellence and optimized efficiency within our partnership. It is critically important for your business to streamline fulfillment processes to get every order filled and shipped on time. Because of our dedication to you, we have become one of the top 3PL companies in Chicago. Contact us for more information regarding distribution centers, how fulfillment centers work, and what services are available.