Order-to-Cash
Optimized Cash Flow, Satisfied Retail Customers
Automate your order-to-cash process!
What is Order to Cash (O2C)?
Order to Cash (O2C) is an important financial process that covers the entire period from a customer's purchase to the posting of the money. For large retailers, managing O2C effectively means dealing with many sales channels and multiple payment methods.
O2C Process
The Most Important Steps in Retail
A well-managed O2C process ensures that revenue flows into the business efficiently and without delays or errors.
Order Placement
Customers place their orders via various channels, e.g. brick-and-mortar stores, e-commerce websites or mobile apps.
Payment Processing
Payments are made via cashless methods such as credit cards, debit cards, digital wallets or other payment methods, each of which has its own processing requirements.
Data Collection
Sales and payment data must be accurately recorded and reconciled across all systems to avoid discrepancies.
Reconciliation
Ensure that sales data and payment records match and that all amounts owed have been received.
Accounting
Finalizing transactions by accurately recording them in the company's financial reports.
The Challenges of Payment Reconciliation in Retail
For large retailers, the O2C process can be a real challenge. Here are some of the biggest issues businesses face:
- Complexity Due to Multiple Sales Channels: Sales often come from different sources such as brick-and-mortar stores, online stores, mobile apps and third-party marketplaces. This diversity leads to fragmented data collection, which makes it difficult to reconcile payments. Each platform has its own processes, making the matching of orders and payments complex and error-prone.
- Different Cashless Payment Methods: Customers use a wide variety of cashless payment methods such as credit cards, debit cards, digital wallets or mobile payment systems. Each of these methods has specific fees, deadlines and processing requirements that make reconciliation difficult. This variety of payment methods makes it difficult to maintain an overview and correctly allocate each transaction.
- Aggregated Payments and Commission Deductions: Payments are often aggregated by banks or payment service providers so that multiple transactions are combined into a single deposit. This leads to challenges when it comes to correctly allocating specific payments to an order. Without an automated solution, this allocation can be extremely time-consuming and error-prone.
- Time Differences in Processing: Payments often take several days to fully process, especially for international transactions or complex sales channels. These delays can lead to gaps that create discrepancies between sales and payment data. Such gaps make it difficult to ensure accurate reconciliation.
- Manual Reconciliation Issues: Many retailers still try to reconcile payments manually. However, this is often inefficient, time-consuming and error-prone. Human error, high operational costs and slow financial close are typical consequences of manual reconciliation.
- Human Error: Data entry errors are common and can lead to significant discrepancies that require additional effort to resolve.
- High Costs: Manual reconciliation is labor-intensive and increases operating costs as employees have to spend a lot of time on simple, repetitive tasks.
- Slow Financial Close: Manual reconciliation slows down the financial close process, which can affect the timely preparation of financial reports.
How Reconhub Supports You with Your Financial Processes
Automation is key to overcoming the challenges of the O2C process. ReconHub offers numerous advantages to increase your efficiency and minimize errors.
Increased Accuracy
Automation significantly reduces the risk of human error. Each transaction is precisely reconciled, minimizing discrepancies.
Real-Time Reconciliation
Automated solutions enable real-time reconciliation of payments and sales data, reducing the likelihood of errors.
Reduced Labor Costs
Finance teams spend less time on manual tasks and can focus on more strategic work instead.
Compliance with Audit Regulations
Automated systems create a clear and consistent audit trail that facilitates regulatory compliance.
Optimize Your Payment Reconciliation with Automation
Start now and take your O2C process to the next level!
Frequently Asked Questions
Why is the O2C process so important for the retail sector?
An optimized and efficient O2C process creates satisfied customers, which usually translates into positive reviews, organic word-of-mouth recommendations and ultimately repeat purchases.
How does ReconHub support the introduction of new payment methods and trends in the future?
Deepen Your Knowledge
Blog articles about order-to-cash in retail.
