Order-to-cash performance is a subject that small businesses and large corporations have to evaluate, in order to retain cash flow, profitability and reduce finance and factoring expenses. While financial vehicles exist (including accounts receivable factoring) to help businesses shorten the period between production, delivery and payment for goods and services, changes in BPTA (business process technology alignment) are key.
There are five stages of business process technology alignment that allow organizations to align processes, control expenses and improve revenue cycles.
1. Discovery and Opportunity
Businesses can evaluate each division, or step from purchasing and inventory procurement, to production, sales and marketing, then to delivery and compensation for goods or services. By mapping the flow of expense through every channel, including materials, and personnel, an opportunity to identify areas that require improvement are revealed.
2. Analytics and Evaluation of Production and Revenue Cycles
Each business unit or production step should be documented thoroughly. Production or service delivery issues and obstacles should be identified, and solutions are proposed to improve non-linear methods that increase cost, and reduce efficiencies. Rethink the flow of your product or service through every channel.
3. Process Design Create a new plan for each process that balances efficiency with key performance indicators (KPI's) that will help provide ongoing measurement and evaluation of improvements.
What cost saving measures will be reported? How often? Design a simplified, streamlined method of delivering your quality product or service without compromise, while shortening production time, inventory management (including logistics and storage). Re-design processes that impact sales and revenue collection, refund or replacement policies, and other opportunities for profit loss.
4. Team and Interdepartmental Alignment Combine objectives and goals with systematic reporting from all business units.
This will help address the overall macro goals for the organization. Ensure that divisions that are progressing are acknowledged for leadership and achieving results, and share talent between departments to help underperforming teams reach new KPI’s.
5. Organizational Implementation and Maintenance Inform, train, monitor and repeat.
Implementation involves more than just a launch of newly designed processes, but continuing support to ensure that they are executed correctly to optimize revenue cycles. Incorporate a program that encourages employees to be part of continual process improvement, and incentivize (through recognition or other perks) cost saving contributions and employee lead innovation. In the contemporary global business environment, it is not enough to simply excel at generating sales. The efficiency of an organization from the bottom up determines profitability, and sustainability with increasing demands from international competitors, and it should be viewed as a business «profitability audit» that is essential for success.