Blog

Automated invoice processing: Choosing the right automation software
Trending articles

Automated Invoice Processing: Choosing the Right Automation Software

In our previous article “Streamline accounts payable with automated document processing“, we discussed the importance of an automated accounts payable (AP) cycle for businesses aiming to streamline their accounting activities and establish a transparent, efficient financial supply chain. If you recall, the invoice, being the central document in the AP cycle, plays a pivotal role in this process. As such, selecting the appropriate automation software for invoice processing becomes essential for finance teams. In this follow-up article, we’ll delve deeper into this topic, outlining the features businesses should consider in their quest for the right automation software.

Share:

Unraveling the Complications in Invoice Processing

Invoice processing begins as soon as the accounts payable department receives an invoice. The steps involved, whether they’re paper-based or semi-digitised (mainly PDF invoices), tend to be slow and often lead to inaccuracies. The primary hurdles in processing paper or PDF invoices include excessive manual work, high costs, and the need to navigate multiple systems.

Various automation software tools on the market aim to address these issues, aiming to digitally connect business partners and automate the AP processes.

Understanding the Role of EDI in Invoicing

EDI is commonly used for automating B2B communication, including invoice processing. However, many users find that EDI invoices do not provide the level of automation they initially expected. While EDI offers benefits such as faster, more efficient processes that are less prone to errors, it also comes with several drawbacks.

Limitations and Challenges of EDI Invoicing
1. Restrictive nature
Businesses opting for EDI invoicing must agree on a specific EDI standard and version, which tend to be highly rigid.

2. Varied interpretations of standards

Different businesses interpret EDI standards differently, leading to potential discrepancies in invoices. This can result in the need to maintain multiple EDI connections using various standards and formats.

3. High cost and complexity

EDI can be prohibitively expensive and complicated for many suppliers.

4. Additional burden on IT

EDI projects often require the internal IT team’s involvement, adding to their existing responsibilities.

5. Limited supplier connectivity

Some vendors may be too small for EDI, and it isn’t compatible with all ERP systems.

6. Long and costly implementation

EDI projects can be time-consuming and expensive to set up, with initial capital investment needed for various software and specialists. The return on investment (ROI) for EDI projects is typically slow.

Spotlight on the Right Automation Software

When considering automation software for invoice processing, certain features should be prioritized:

Flexibility

To truly benefit from automated invoice processing and automated accounts payable workflows, all incoming invoices must be automated irrespective of the format or standard.

Automation software like the Netfira Platform automates incoming invoices by extracting relevant data, processing it intelligently based on defined workflows and exporting it into the downstream system. The platform provides fully automated processing of electronic invoices from PDF, ZUGFeRD, XRechnung and other formats making restrictions of standards and versions a thing of the past.

Integration

Businesses should look for automation software which provides easy integration in a variety of systems.

While EDI solutions cannot be used with all ERP systems, other automation tools can easily be integrated with all SAP and non-SAP systems. The Netfira Platform, for example, integrates into any downstream ERP, accounting or other IT system.

Efficiency

Improving operational efficiency is key for every automation project in AP. Automated invoice processing means reducing manual tasks like manual data entry to a minimum and to noticeably relieving teams of slow and error-prone activities. Businesses should choose software solutions based on the degree of efficiency they provide.

When processing invoices, Netfira automatically assigns invoices and shipping notices to orders or order items thus facilitating the comparison of these B2B documents. Moreover, the platform enables intelligent invoice data processing because it provides internal enrichment of invoice data before exporting it to subsequent customer systems. For example, indicators which are not on the document can be transferred and addresses can be checked. The automation solution reaches a high efficiency as it not only captures data but also understands and compares data to ultimately process it intelligently.

Supplier connection

Digitally connecting suppliers and other business partners is a central goal of process automation in accounts payable. However, despite advancements in technology such as EDI solutions, many business partners are still not connected.

Unlike EDI, Netfira can connect all important business partners easily, quickly and cost-effectively. With the Netfira Onboarding App buyers can connect suppliers in three simple steps without having to burden the internal IT. Moreover, there are no barriers for suppliers. Suppliers do not occur any costs and they do no have to change their processes. In contrast to classic EDI technology, the Netfira Platform can be used with both SAP and non-SAP systems.

Data accuracy

Accuracy is a vital feature organisations should focus on to ensure high data quality.

Artificial Intelligence supports the connection of suppliers and thus enables Netfira to achieve highest data accuracy when extracting data. Moreover, it provides the foundation for processing invoice data fully automatically and intelligently. With Netfira’s AI, unstructured data in free texts or in documents such as order confirmations and customer orders can be harmonised and automatically processed. Deviating terms in supplier documents, ambiguous units of measurement or different languages are no longer a problem as AI is constantly learning.

Implementation

Software-as-a-Service (SaaS) solutions provide AP with future-proof technology which enables the automation of operational activities and document processing. Accounts payable software needs to be efficient, reliable and flexible, which are distinct advantages of cloud-based SaaS solutions.

As a SaaS solution operated in the cloud, the Netfira Platform comes with many advantages for the accounts payable department. Unlike traditional EDI solutions, the Netfira Platform is implemented very quickly – often in weeks. The internal IT department is not burdened with additional work because there are only five quick tasks which need to completed. SaaS means low costs for companies as they do not require an internal server infrastructure or need to install and run the application on their systems and thus do not need to invest in hardware and licences. As a web-based solution, users and IT benefit from Netfira automatically updating the software on a regular basis.

Customisation

It is advisable to choose automation software for automated invoice processing which can be easily customised. Unlike off-the-shelf software, custom software is tailor-made, easy to modify and scale.

As a SaaS solution hosted in the cloud, the Netfira Platform can be customised for individual business needs. Teams can work within their familiar environment. There is no need to make disruptive changes to processes or systems as the system can adapt to the relevant requirements of the business. On top of that, the software is designed to scale as the business requires.

Security

SaaS solutions relieve the internal IT because the software provider is responsible for the maintenance and all security-related aspects of the software.

Netfira has made data security a top priority. The Netfira Platform is compliant with the GDPR. Netfira adheres to ISO guidelines 27001, 27017 and 27018 and is certified accordingly. The data centre and support are located in Germany.

Automating Invoice Processing with Future-Proof Technology

To meet the ever-evolving demands of accounts payable and to successfully automate invoices, businesses should opt for technology that’s future-proof, reliable, and agile. Key factors to consider when evaluating automation software are flexibility, integration, efficiency, supplier connectivity, data accuracy, implementation, customisation, and security.

By using the Netfira Platform to automate invoices, accounting teams can enjoy a scalable and easy-to-implement solution that delivers quick ROI. With Netfira, manual work in the accounts payable process is significantly reduced, thus empowering employees to focus on more strategic tasks. This intelligent document automation software streamlines the approval, payment, and reconciliation of invoices, making accounting processes more efficient, transparent, and reliable. As a result, compliance and quality management are enhanced.

Furthermore, the Netfira Platform provides benefits beyond those of traditional EDI invoicing solutions. As a flexible SaaS solution, it adapts to business needs, alleviates the workload of the internal IT team, and connects suppliers quickly, easily, and cost-effectively. This advanced platform solution enhances supplier relations and optimises processes across departments and businesses through automation. By unlocking the full potential of automated invoice processing, businesses can gain a significant competitive edge.

Webinar: Einführung in die Netfira-Plattform

Video anschauen

Pfleiderer Case Study

Learn how Pfleiderer successfully digitised its procurement through process automation.

Watch the video

Return to blog
June 21, 2023
Streamline accounts payable with automated document processing

Trending articles

Streamline accounts payable with automated document processing

Today, many companies still manage their accounts payable (AP) process through a paper-based system, making it slow, error-prone, and inefficient. Manual data entry, comparison, and paper-based record-keeping no longer meet the needs of businesses that seek an optimal return on their accounting activities and a transparent financial supply chain. Accounts payable automation solutions are thus becoming integral to every company’s digitisation efforts. By leveraging automated document processing, businesses can streamline their AP operations, optimising business processes while saving time and money.

Share:

Understanding the Accounts Payable Process

The accounts payable process is an essential component of the broader expenditure and purchasing cycle, forming part of the Procure-to-Pay (P2P) process. This cycle encompasses procurement, goods receipts, invoice processing, and business partner payments.

The AP process, in particular, focuses on invoice processing and supplier payments. After an order is placed and the customer receives the desired product or service, various essential accounting steps must be completed. These steps include invoice data capture, coding invoices with the correct account and cost centres, matching invoices to purchase orders, approving invoices, and posting payments.

The Accounts Payable Cycle: A Closer Look

The accounts payable cycle starts with the vendor. Once the procurement team places an order with the supplier, the company receives the product or service. The accounts payable department then logs the receiving report or the advanced shipping note. Subsequently, the supplier sends an invoice for the goods shipped or the service rendered. The AP department verifies the information on the invoice to ensure accuracy, often comparing it with B2B documents such as the receiving report, purchase order, or the shipping notice. It’s crucial to match the quantities, prices, and descriptions on each document to the invoice. If all the information is correct, the invoice is authorised for payment.

Why Automate the Accounts Payable Cycle?

Traditionally, the accounts payable process is paper-based, manual, and time-consuming. Financial teams must compare, validate, and enter data manually into downstream systems. Managing large volumes of paperwork can overwhelm AP teams, leading to errors, delays, inefficient processes, and unnecessary costs, affecting not only employees but also the company’s bottom line.

The Key to Streamlining Accounts Payable: Automated Document Processing

Automation software is essential for streamlining accounts payable. Given that the steps in the AP process involve exchanging, verifying, comparing, and approving data and documents, it’s clear that manual operational accounting processes are time-consuming and prone to human error. By implementing automated document flows, businesses can streamline accounts payable effectively. Accounts payable software offers automated document processing, digitising financial and accounting processes, and enhancing efficiency.

Automating Accounts Payable Cycles

The basic accounts payable cycle includes three significant documents: purchase order (PO), advanced shipping notice (ASN), and invoice. Financial teams must compare the incoming invoice with the advanced shipping notice or the purchase order to ensure correctness before authorising payment.

Accounts payable software automatically processes purchase orders, shipping notices, and invoices, facilitating optimised digital processes. The software extracts relevant data from documents and exports it into ERP or other IT systems. Invoices and shipping notices can be automatically assigned to orders or order items, ensuring transparency, speed, and accuracy. This automation relieves employees from manually checking and comparing documents, offering them full control and visibility of automated workflows, and providing critical real-time information.

The Benefits of Automated Accounts Payable

1. Less manual work

Automation significantly reduces manual activities in accounts payable. There’s no need for manual data entry, as the software captures data automatically, ensuring high accuracy with minimal human intervention.

2. Time savings

Automated document processing speeds up invoice processing, making digital invoices easy to search for and impossible to misplace. Streamlining the approval process ensures that the right person receives the right invoice at the right time, freeing up the finance team to focus on other important tasks. According to a report by Ardent Partners, organisations that automate their accounts payable processes can process invoices up to 9 times faster.

3. Money savings

Manual processes are not only time-consuming but also costly. By eliminating manual work and saving time, businesses can reduce labour costs, particularly those associated with manual data entry, storage, and postage. Simultaneously, they can ensure that payments are always made on time. Ardent Partners’ research shows that enterprises using automated AP processes can process invoices at a cost that is 92% lower than those relying on manual processes.

4. Increased sustainability

Paperless accounting processes not only improve efficiency, accuracy, and transparency, but they also support sustainability. Document automation saves valuable resources, contributing to an eco-friendlier business model.

5. Enhanced visibility and more control

Automated accounts payable processes provide enhanced visibility into payment workflows, helping prevent errors and detect suspicious activity. They maintain compliance, avoid fees, and create a clear audit trail.

6. Improved accuracy 

Accounts payable automation tools reliably reduce errors and increase accuracy. A survey by APQC shows that organisations that automate their accounts payable processes have invoice processing error rates that are up to 66% lower than those relying on manual processes.

Conclusion: The Advantage of Streamlined Accounts Payable Through Automated Document Processing

Automated document processing is the key to streamlining accounts payable. By choosing an accounts payable automation software, businesses can eliminate manual accounting tasks, improve accuracy, achieve data transparency, automate operational processes, and take control of important financial workflows. The automated processing of document flows helps enterprises achieve a higher level of efficiency and accountability, while also saving time, human resources, and money.

As businesses look towards a more digital future, the benefits of automating the AP process are clear. Companies seeking to boost efficiency, reduce errors, and save costs should consider investing in automated document processing solutions. The initial investment in this technology can yield significant returns in the long run, contributing to business growth and financial stability.

AP whitepaper

Automated invoice processing: Optimise accounts payable processes with IDP

Read now

Whitepaper: Kreditorenbuch-haltung

Automatisierte Rechnungs-verarbeitung: Optimieren Sie Ihre Kreditorenbuchhaltung mit IDP

Whitepaper lesen

Return to blog

May 17, 2023
Why you should automate customer orders to optimise your Order-to-Cash process
Trending articles

Why you should automate customer orders to optimise your Order-to-Cash process

The Order-to-Cash (O2C) process is critical and complex for any organization. Inefficient manual O2C processes can negatively impact business outcomes and damage customer relationships. Since the exchange and processing of B2B documents is central to the O2C cycle, automating document processing is crucial to achieving order-to-cash automation. Automated customer order processing is particularly important in automating the O2C process. The Netfira Platform automates incoming customer orders in just six simple steps, which helps sales teams achieve greater transparency and efficiency by optimising the O2C process.

Share:

What is the Order-to-Cash process?

Order to cash (OTC or O2C) refers to one of the most critical and complex business processes for receiving and processing customer orders and revenue recognition. It involves the entire process of receiving a customer’s order, from the point of ordering to the customer’s payment of their outstanding account.

O2C encompasses all the steps involved in processing customer orders, from the moment a customer places the order to when payment is received and applied to accounts receivable. These steps include order management, order fulfillment, billing, payment processing, and reporting.

The Order-to-Cash process is primarily assigned to the sales department within a company since it is an order process seen by the supplier. The Procure-to-Pay (P2P) process, on the other hand, is equivalent to the Order-to-Cash process but from the procurement side.

Automating O2C processes is crucial in achieving greater efficiency and customer satisfaction. With automated document processing, such as that offered by the Netfira Platform, incoming customer orders can be automated in just six steps, improving transparency and efficiency in the O2C process.

The four phases of the Order-to-Cash process

The O2C process can be roughly divided into four phases:

1. Pre-sales activities

Pre-sales activities refer to the actions that take place before an order is processed. It starts with the contact between the customer and the company. Usually, the customer makes a non-binding inquiry in advance, which involves comparing their needs with the product or service. This is followed by an offer containing all the important information for a potential order.

2. Customer order processing

The processing of the customer order is the central element of the Order-to-Cash process. In most cases, the customer order contains numerous pieces of information, such as the price, key data on goods and/or services, delivery quantity and data, shipment and payment terms.

3. Shipping

The order processing is followed by the shipment of goods or, alternatively, by providing the respective service.

4. Invoicing

Once the goods are delivered, the next step is the payment process. Normally, payment is made as soon as the customer has received the ordered goods or service. However, advance payment is also possible. Invoicing also includes receivables management and the possible creation of credit notes.

Challenges that businesses face in the Order-to-Cash process

The Order-to-Cash process presents several challenges for businesses, with many companies struggling with slow and error-prone manual processes. One significant challenge is the high risk of input errors, which can lead to customer complaints and delays in payment processing. In a study by the Institute of Finance and Management, 51% of respondents reported experiencing an increase in customer complaints due to O2C issues. Additionally, paper-based processes can be time-consuming and prone to mistakes, leading to increased costs and inefficiencies. These challenges can impact businesses’ bottom lines and damage customer relationships, making it essential to streamline and optimise the O2C process.

Order-to-Cash process automation through document automation

Document processing plays a central role in the O2C process. While the O2C cycle encompasses many sub-processes and documents such as quotes, shipping notices, and invoices, processing incoming customer orders lies at the heart of the process. However, in many companies, the sales process remains predominantly paper-based, manual, and time-consuming. Sales teams need to manually compare and validate data from customer orders and enter them into downstream systems, which poses significant challenges. Managing multiple paper documents is challenging, prone to errors and inaccuracies, and slows down employees and workflows, thereby negatively impacting the entire O2C process. Order-to-Cash automation can only succeed when customer orders are processed automatically.

Benefits of automating customer orders

Digitizing documents in a company’s sales process, such as incoming customer orders, can significantly increase operational efficiency. Automated processing of customer orders can reduce costs by up to 30%. This is because automated document processing eliminates the need for tedious manual data entry. As a result, input errors are minimized, processes are sped up, and employees are freed from non-value-adding work. Overall, the O2C process becomes more transparent, reliable, and faster.

How to automate customer orders with Netfira

Netfira’s cloud-based SaaS solution automates the bidirectional exchange of B2B documents and data. The Netfira Platform automatically extracts relevant data, processes it intelligently, and exports it to any ERP system. By automating the processing of incoming customer orders, businesses can optimise their O2C process and relieve employees. The automation of the document workflow comprises 6 steps:
1. Connecting business partners
With the Netfira Onboarding App, sales teams can quickly, easily, and cost-effectively connect with business partners. The onboarding process consists of three simple steps and usually takes only a few minutes. The AI-supported app technology can process and harmonize unstructured data or free texts in customer orders automatically, achieving exceptional data accuracy and minimizing the need for manual changes and corrections. With these mechanisms, Netfira connects business partners to its digitization process and creates recognition profiles for incoming customer orders.

2. Extracting data from customer orders

After the Netfira Platform recognizes the documents of the connected business partners, the data stored for the Netfira customer in the recognition profile is automatically extracted from the document.

3. Enriching data

If required, the extracted data can be enriched with additional data that is important for sales and its subsequent system but is not included in the business partner’s documents.

4. Comparing data

The extracted data from the customer orders can be compared with master data provided by the Netfira customer using an application programming interface (API) or file interface. For example, the system can verify whether the article number provided on the business partner’s document corresponds to the article number in the sales system.

5. Providing extracted data

The extracted data is provided to the sales department in an individual data exchange format. Possible formats include SAP-IDoc, ORDERS-edi format, XML, or CSV data file.

6. Importing data into the ERP system

The provided data is imported into the ERP or merchandise management system of the sales department. Import is possible into any system that can transfer extracted and provided data from a data source into the sales order entry.

Sales benefits from automated customer orders and an optimized O2C process

Cumbersome and labor-intensive O2C processes can cause significant problems for businesses and their customers. Slow and error-prone processes can hurt cash flow, lead to shipping delays, and result in a poor customer experience. However, by automating the processing of incoming customer orders, the O2C process can be noticeably optimised, resulting in numerous benefits.

Automated document workflows can significantly increase the accuracy of data entry, reducing the risk of input errors and freeing up employees from time-consuming and repetitive tasks. This automation can also speed up processes and allow businesses to make faster decisions.

With greater visibility into the O2C process, sales teams can make better decisions and respond more quickly to changing market conditions. Additionally, automated document workflows create transparency and efficiency, enabling businesses to identify and address any issues that may arise in the process.

Overall, automated document workflows in the O2C process can provide businesses with numerous benefits, including improved data accuracy, faster decision making, greater visibility into cash flow, and a better customer experience.

Webinar: Auftragsbestätigung-en automatisieren

Video ansehen

Pfleiderer Case Study

Learn how Pfleiderer successfully digitised its procurement through process automation.

Watch the video

Return to blog
May 11, 2023
Why you should automate customer orders to optimise your Order-to-Cash process
Trending articles

Why you should automate customer orders to optimise your Order-to-Cash process

The Order-to-Cash (O2C) process is critical and complex for any organization. Inefficient manual O2C processes can negatively impact business outcomes and damage customer relationships. Since the exchange and processing of B2B documents is central to the O2C cycle, automating document processing is crucial to achieving order-to-cash automation. Automated customer order processing is particularly important in automating the O2C process. The Netfira Platform automates incoming customer orders in just six simple steps, which helps sales teams achieve greater transparency and efficiency by optimising the O2C process.

Share:

What is the Order-to-Cash process?

Order to cash (OTC or O2C) refers to one of the most critical and complex business processes for receiving and processing customer orders and revenue recognition. It involves the entire process of receiving a customer’s order, from the point of ordering to the customer’s payment of their outstanding account.

O2C encompasses all the steps involved in processing customer orders, from the moment a customer places the order to when payment is received and applied to accounts receivable. These steps include order management, order fulfillment, billing, payment processing, and reporting.

The Order-to-Cash process is primarily assigned to the sales department within a company since it is an order process seen by the supplier. The Procure-to-Pay (P2P) process, on the other hand, is equivalent to the Order-to-Cash process but from the procurement side.

Automating O2C processes is crucial in achieving greater efficiency and customer satisfaction. With automated document processing, such as that offered by the Netfira Platform, incoming customer orders can be automated in just six steps, improving transparency and efficiency in the O2C process.

The four phases of the Order-to-Cash process

The O2C process can be roughly divided into four phases:

1. Pre-sales activities

Pre-sales activities refer to the actions that take place before an order is processed. It starts with the contact between the customer and the company. Usually, the customer makes a non-binding inquiry in advance, which involves comparing their needs with the product or service. This is followed by an offer containing all the important information for a potential order.

2. Customer order processing

The processing of the customer order is the central element of the Order-to-Cash process. In most cases, the customer order contains numerous pieces of information, such as the price, key data on goods and/or services, delivery quantity and data, shipment and payment terms.

3. Shipping

The order processing is followed by the shipment of goods or, alternatively, by providing the respective service.

4. Invoicing

Once the goods are delivered, the next step is the payment process. Normally, payment is made as soon as the customer has received the ordered goods or service. However, advance payment is also possible. Invoicing also includes receivables management and the possible creation of credit notes.

Challenges that businesses face in the Order-to-Cash process

The Order-to-Cash process presents several challenges for businesses, with many companies struggling with slow and error-prone manual processes. One significant challenge is the high risk of input errors, which can lead to customer complaints and delays in payment processing. In a study by the Institute of Finance and Management, 51% of respondents reported experiencing an increase in customer complaints due to O2C issues. Additionally, paper-based processes can be time-consuming and prone to mistakes, leading to increased costs and inefficiencies. These challenges can impact businesses’ bottom lines and damage customer relationships, making it essential to streamline and optimise the O2C process.

Order-to-Cash process automation through document automation

Document processing plays a central role in the O2C process. While the O2C cycle encompasses many sub-processes and documents such as quotes, shipping notices, and invoices, processing incoming customer orders lies at the heart of the process. However, in many companies, the sales process remains predominantly paper-based, manual, and time-consuming. Sales teams need to manually compare and validate data from customer orders and enter them into downstream systems, which poses significant challenges. Managing multiple paper documents is challenging, prone to errors and inaccuracies, and slows down employees and workflows, thereby negatively impacting the entire O2C process. Order-to-Cash automation can only succeed when customer orders are processed automatically.

Benefits of automating customer orders

Digitizing documents in a company’s sales process, such as incoming customer orders, can significantly increase operational efficiency. Automated processing of customer orders can reduce costs by up to 30%. This is because automated document processing eliminates the need for tedious manual data entry. As a result, input errors are minimized, processes are sped up, and employees are freed from non-value-adding work. Overall, the O2C process becomes more transparent, reliable, and faster.

How to automate customer orders with Netfira

Netfira’s cloud-based SaaS solution automates the bidirectional exchange of B2B documents and data. The Netfira Platform automatically extracts relevant data, processes it intelligently, and exports it to any ERP system. By automating the processing of incoming customer orders, businesses can optimise their O2C process and relieve employees. The automation of the document workflow comprises 6 steps:
1. Connecting business partners
With the Netfira Onboarding App, sales teams can quickly, easily, and cost-effectively connect with business partners. The onboarding process consists of three simple steps and usually takes only a few minutes. The AI-supported app technology can process and harmonize unstructured data or free texts in customer orders automatically, achieving exceptional data accuracy and minimizing the need for manual changes and corrections. With these mechanisms, Netfira connects business partners to its digitization process and creates recognition profiles for incoming customer orders.

2. Extracting data from customer orders

After the Netfira Platform recognizes the documents of the connected business partners, the data stored for the Netfira customer in the recognition profile is automatically extracted from the document.

3. Enriching data

If required, the extracted data can be enriched with additional data that is important for sales and its subsequent system but is not included in the business partner’s documents.

4. Comparing data

The extracted data from the customer orders can be compared with master data provided by the Netfira customer using an application programming interface (API) or file interface. For example, the system can verify whether the article number provided on the business partner’s document corresponds to the article number in the sales system.

5. Providing extracted data

The extracted data is provided to the sales department in an individual data exchange format. Possible formats include SAP-IDoc, ORDERS-edi format, XML, or CSV data file.

6. Importing data into the ERP system

The provided data is imported into the ERP or merchandise management system of the sales department. Import is possible into any system that can transfer extracted and provided data from a data source into the sales order entry.

Sales benefits from automated customer orders and an optimized O2C process

Cumbersome and labor-intensive O2C processes can cause significant problems for businesses and their customers. Slow and error-prone processes can hurt cash flow, lead to shipping delays, and result in a poor customer experience. However, by automating the processing of incoming customer orders, the O2C process can be noticeably optimised, resulting in numerous benefits.

Automated document workflows can significantly increase the accuracy of data entry, reducing the risk of input errors and freeing up employees from time-consuming and repetitive tasks. This automation can also speed up processes and allow businesses to make faster decisions.

With greater visibility into the O2C process, sales teams can make better decisions and respond more quickly to changing market conditions. Additionally, automated document workflows create transparency and efficiency, enabling businesses to identify and address any issues that may arise in the process.

Overall, automated document workflows in the O2C process can provide businesses with numerous benefits, including improved data accuracy, faster decision making, greater visibility into cash flow, and a better customer experience.

Webinar: Auftragsbestätigung-en automatisieren

Video ansehen

Pfleiderer Case Study

Learn how Pfleiderer successfully digitised its procurement through process automation.

Watch the video

Return to blog
May 11, 2023
Why you should automate customer orders to optimise your Order-to-Cash process
Trending articles

Why you should automate customer orders to optimise your Order-to-Cash process

The Order-to-Cash (O2C) process is critical and complex for any organization. Inefficient manual O2C processes can negatively impact business outcomes and damage customer relationships. Since the exchange and processing of B2B documents is central to the O2C cycle, automating document processing is crucial to achieving order-to-cash automation. Automated customer order processing is particularly important in automating the O2C process. The Netfira Platform automates incoming customer orders in just six simple steps, which helps sales teams achieve greater transparency and efficiency by optimising the O2C process.

Share:

What is the Order-to-Cash process?

Order to cash (OTC or O2C) refers to one of the most critical and complex business processes for receiving and processing customer orders and revenue recognition. It involves the entire process of receiving a customer’s order, from the point of ordering to the customer’s payment of their outstanding account.

O2C encompasses all the steps involved in processing customer orders, from the moment a customer places the order to when payment is received and applied to accounts receivable. These steps include order management, order fulfillment, billing, payment processing, and reporting.

The Order-to-Cash process is primarily assigned to the sales department within a company since it is an order process seen by the supplier. The Procure-to-Pay (P2P) process, on the other hand, is equivalent to the Order-to-Cash process but from the procurement side.

Automating O2C processes is crucial in achieving greater efficiency and customer satisfaction. With automated document processing, such as that offered by the Netfira Platform, incoming customer orders can be automated in just six steps, improving transparency and efficiency in the O2C process.

The four phases of the Order-to-Cash process

The O2C process can be roughly divided into four phases:

1. Pre-sales activities

Pre-sales activities refer to the actions that take place before an order is processed. It starts with the contact between the customer and the company. Usually, the customer makes a non-binding inquiry in advance, which involves comparing their needs with the product or service. This is followed by an offer containing all the important information for a potential order.

2. Customer order processing

The processing of the customer order is the central element of the Order-to-Cash process. In most cases, the customer order contains numerous pieces of information, such as the price, key data on goods and/or services, delivery quantity and data, shipment and payment terms.

3. Shipping

The order processing is followed by the shipment of goods or, alternatively, by providing the respective service.

4. Invoicing

Once the goods are delivered, the next step is the payment process. Normally, payment is made as soon as the customer has received the ordered goods or service. However, advance payment is also possible. Invoicing also includes receivables management and the possible creation of credit notes.

Challenges that businesses face in the Order-to-Cash process

The Order-to-Cash process presents several challenges for businesses, with many companies struggling with slow and error-prone manual processes. One significant challenge is the high risk of input errors, which can lead to customer complaints and delays in payment processing. In a study by the Institute of Finance and Management, 51% of respondents reported experiencing an increase in customer complaints due to O2C issues. Additionally, paper-based processes can be time-consuming and prone to mistakes, leading to increased costs and inefficiencies. These challenges can impact businesses’ bottom lines and damage customer relationships, making it essential to streamline and optimise the O2C process.

Order-to-Cash process automation through document automation

Document processing plays a central role in the O2C process. While the O2C cycle encompasses many sub-processes and documents such as quotes, shipping notices, and invoices, processing incoming customer orders lies at the heart of the process. However, in many companies, the sales process remains predominantly paper-based, manual, and time-consuming. Sales teams need to manually compare and validate data from customer orders and enter them into downstream systems, which poses significant challenges. Managing multiple paper documents is challenging, prone to errors and inaccuracies, and slows down employees and workflows, thereby negatively impacting the entire O2C process. Order-to-Cash automation can only succeed when customer orders are processed automatically.

Benefits of automating customer orders

Digitizing documents in a company’s sales process, such as incoming customer orders, can significantly increase operational efficiency. Automated processing of customer orders can reduce costs by up to 30%. This is because automated document processing eliminates the need for tedious manual data entry. As a result, input errors are minimized, processes are sped up, and employees are freed from non-value-adding work. Overall, the O2C process becomes more transparent, reliable, and faster.

How to automate customer orders with Netfira

Netfira’s cloud-based SaaS solution automates the bidirectional exchange of B2B documents and data. The Netfira Platform automatically extracts relevant data, processes it intelligently, and exports it to any ERP system. By automating the processing of incoming customer orders, businesses can optimise their O2C process and relieve employees. The automation of the document workflow comprises 6 steps:
1. Connecting business partners
With the Netfira Onboarding App, sales teams can quickly, easily, and cost-effectively connect with business partners. The onboarding process consists of three simple steps and usually takes only a few minutes. The AI-supported app technology can process and harmonize unstructured data or free texts in customer orders automatically, achieving exceptional data accuracy and minimizing the need for manual changes and corrections. With these mechanisms, Netfira connects business partners to its digitization process and creates recognition profiles for incoming customer orders.

2. Extracting data from customer orders

After the Netfira Platform recognizes the documents of the connected business partners, the data stored for the Netfira customer in the recognition profile is automatically extracted from the document.

3. Enriching data

If required, the extracted data can be enriched with additional data that is important for sales and its subsequent system but is not included in the business partner’s documents.

4. Comparing data

The extracted data from the customer orders can be compared with master data provided by the Netfira customer using an application programming interface (API) or file interface. For example, the system can verify whether the article number provided on the business partner’s document corresponds to the article number in the sales system.

5. Providing extracted data

The extracted data is provided to the sales department in an individual data exchange format. Possible formats include SAP-IDoc, ORDERS-edi format, XML, or CSV data file.

6. Importing data into the ERP system

The provided data is imported into the ERP or merchandise management system of the sales department. Import is possible into any system that can transfer extracted and provided data from a data source into the sales order entry.

Sales benefits from automated customer orders and an optimized O2C process

Cumbersome and labor-intensive O2C processes can cause significant problems for businesses and their customers. Slow and error-prone processes can hurt cash flow, lead to shipping delays, and result in a poor customer experience. However, by automating the processing of incoming customer orders, the O2C process can be noticeably optimised, resulting in numerous benefits.

Automated document workflows can significantly increase the accuracy of data entry, reducing the risk of input errors and freeing up employees from time-consuming and repetitive tasks. This automation can also speed up processes and allow businesses to make faster decisions.

With greater visibility into the O2C process, sales teams can make better decisions and respond more quickly to changing market conditions. Additionally, automated document workflows create transparency and efficiency, enabling businesses to identify and address any issues that may arise in the process.

Overall, automated document workflows in the O2C process can provide businesses with numerous benefits, including improved data accuracy, faster decision making, greater visibility into cash flow, and a better customer experience.

Webinar: Auftragsbestätigung-en automatisieren

Video ansehen

Pfleiderer Case Study

Learn how Pfleiderer successfully digitised its procurement through process automation.

Watch the video

Return to blog
May 11, 2023
Cloud SaaS solution vs on-premise solution

Trending articles

Cloud SaaS solution vs on-premise solution

This information sheet compares SaaS solutions operated in the cloud with on-premise solutions. When selecting procurement software for automating procurement processes, businesses must decide whether they opt for a SaaS solution, which is hosted and maintained by a third-party provider, or whether they want to rely on in-house servers. The info sheet supports the decision process by comparing central aspects such as configuration, costs and scalability.

Share:

Download the information sheet

Please fill out the form below to receive the info sheet.

Return to blog

April 19, 2023
Checklist: Choosing a key user

Trending articles

Checklist: Choosing a key user for your automation project in procurement

When implementing procurement software, it is central to the success of the implementation and the solution itself to determine a key user for the software project. Ideally, one of the users takes on the role of a key user.

It is important to choose the right person for the role of the key user. The key user combines certain skills and meets specific requirements to successfully support the implementation and usage of the automation tool in operational purchasing. This checklist helps you to choose the ideal key user for your automation project in procurement.

Share:

Download the checklist

Please fill out the form below to receive the checklist.

Return to blog

March 17, 2023
Intelligent implementation strategy to maximise ROI of automation projects

Trending articles

Intelligent implementation strategy to maximise ROI of automation projects

For procurement, automating operational processes relieves buyers and downstream departments of manual work. Relying on document processing tools is indispensable but finding the right solution and approach for a simple and effective automation project can be challenging. At Netfira, we are passionate about automating document flows and always try to find innovative ways to ensure our customers have a smooth implementation. We understand that each business faces unique challenges. However, while businesses, processes and people are always unique, there are certain trends that we have identified after years of analysis. One of these trends allows businesses to maximise return on investment (ROI) by prioritising key suppliers when undertaking an automation project.  

Share:

Speeding up ROI makes automation projects more feasible

Automation projects in procurement can be daunting. First of all, the process of selecting a software provider and choosing a software solution can be time-consuming and complex. Checklists for defining software requirements as well as software selection checklists can be useful to support and speed up the process. Secondly, it can be a lot of work to convince key stakeholders of the solution and of the benefits for procurement and the entire organisation. Thirdly, it is often hard to get the budget for the automation project guaranteed. However, having a clear roadmap for the automation project as well as an approach to achieve immediate ROI helps to make projects more feasible.

Massive operational efficiency gains through automating key suppliers  

Having analysed the flow of documents between thousands of B2B connections, we were able to identify trends that help us ensure our business partners’ automation projects are effective. Unsurprisingly, most purchasing departments receive around 60-65% of documents from their 35-45 biggest suppliers. As a result, electronically connecting the key suppliers and automating the document exchange leads to massive operational efficiency gains and a rapid ROI.

EDI for supplier connection does not work for all companies

Some companies use EDI technology to electronically connect their business partners. However, the complexity and cost of this technology limits the number of suppliers whose transactions can be automated this way. Onboarding is typically laborious and disruptive; in-house IT needs to be involved and EDI projects are time-consuming and costly to set up. On top of that, classic EDI solutions cannot be used for non-SAP systems. Since the implementation of EDI solutions is lengthy and complicated, procurement teams benefit from relying on alternatives to EDI.

Time as a vital resource

Time is an essential resource for every company and in every automation project. Achieving a quick ROI in document automation projects by automating key suppliers means gaining valuable time. By connecting the top 30-40 suppliers and automating the flow of documents and data, procurement teams’ workload can be reduced by more than 50%. Because of the reduction of manual activities, buyers have more time to focus on strategic and value- adding tasks. To further benefit from time savings, procurement should rely on digital automation tools that facilitate a quick and uncomplicated supplier connection.

A complete automation solution is the goal

Of course, ultimately a complete solution is the goal. However, the insights gained from having analysed document flows between thousands of B2B connections have a profound impact on how we advise businesses to approach their automation activities.

Automation projects in procurement: The traditional method

Software solutions for automating operational procurement processes are typically rigid. The implementation requires the full range of functions to be set up from the outset and, as a result, the software lacks flexibility and offers functions users do not need.

Setting up the entire solution, as a lot of companies do, means a very long project and implementation time. As a result, resources are tied up in lengthy processes and it takes months until procurement can start to use the automation software and ultimately benefit from it.  

Process automation and digitised information exchange rely on the electronic connection of suppliers and other business partners. Rigid solutions require companies to onboard all their suppliers at once. However, it might not always be possible or beneficial to connect all suppliers right from the beginning. The process of onboarding all business partners prior to the go live is time-consuming, error-prone and an inefficient use of resources.

Maximise ROI through automating key suppliers

With the approach based on our insights, by contrast, procurement teams can automate their key suppliers by volume quickly and easily. Given the fact that 30-40 suppliers often account for 60 or more percent of document volume, focusing on automating the top suppliers means gaining massive operational efficiency and a fast ROI. Once the initial ROI is achieved, users can scale the application and continue to automate the remaining suppliers over time.

Benefits of a SaaS solution

SaaS solutions operated in the cloud enable procurement teams to realise a quick ROI by first automating the most important suppliers before connecting and automating the remaining suppliers and document flows step by step. SaaS solutions are flexible, cost-effective and easy to scale. Modular end-to-end solutions can be deployed in a matter of weeks. Implementing a ready-to-use cloud solution adds value right away and helps to avoid costly delays by long-running projects. Moreover, modular solutions can be deployed and customised for specific project requirements and business needs. Choosing a comprehensive SaaS solution allows users to add functionality over time as they need it and ultimately automate all their business partners and all document flows.

The Netfira approach: maximise ROI through automated key suppliers  

Our focus is on helping our clients automate their workflows. Netfira not only offers a complete, end-to-end and scalable solution with in-depth functionality that has been designed to provide broad capabilities for many business needs, but also constantly explores ways how it can be implemented more efficiently. In this way, Netfira is your automation partner. We want our customers to succeed and strive to help businesses find the right approach to their automation project. That is why we suggest focusing on automating top suppliers first, allowing clients to benefit from the efficiency gained while they onboard the remaining suppliers.

Whitepaper: Document automation along the P2P process

Read now

Whitepaper: Dokumentenauto-matisierung entlang des P2P-Prozesses

Jetzt lesen

Return to blog

March 8, 2023
The ideal key user for procurement automation projects
Trending articles

The ideal key user for procurement automation projects

Nominating a key user when implementing new software solutions in purchasing is essential to the success of the project. “Procurement automation project: Why you need a key user” explains what tasks key users perform and which roles they assume when supporting process automation in their department. But which team members are suitable for becoming key users and what requirements do they need to meet? This blog article sheds light on the question which employees make ideal key users for automation projects in procurement.

Share:

Professional requirements of key users

Business knowledge and experience

A good key user has extensive knowledge and experience when it comes to the business purpose, business goals and corporate alignment. A key user should act as a reliable representative of the purchasing department, if not the entire company.

Methodological knowledge

The key user should be familiar with all the procedures, principles and good practices of the purchasing department. An analytical mindset is beneficial as they need to be detail-oriented while understanding the bigger picture.

Professional knowledge

The key user must have a high level of professional competence and a clear understanding of processes in both their own and related areas. They must be very familiar with the tasks and business processes of their department. Often, operational buyers act as key users in process automation projects in purchasing because they have first-hand experience of the processes and workflows that need to be optimised and automated. They are experts in the enterprise’s existing systems and understand the challenges of the daily business. Therefore, they understand the users’ perspective, goals and problems.

IT affinity

The key user should have concrete skills in handling the software. Since he or she is going to be the core user of the digital automation solution, IT and technology skills are needed.

Understanding of the overall context

To sum up, the ideal key user combines business knowledge, professional knowledge, methodological and IT skills. To support the implementation of an automation solution in purchasing, the ideal candidate should know the entire P2P process and not only certain steps. They should understand how the interfaces within cross-divisional processes function along the supply chain. For example this applies to the awareness of how purchasing interacts with goods receipt or accounts payable. In short, the ideal key user is interested in the overall connection of processes.

Social skills of key users

Key users do not only undergo training through the software provider to test the software and provide feedback. They are also responsible for training other users and function as the main contact person for questions and problems.

The ideal key user has
- didactic skills
- conflict skills
- empathy
- an interest in supporting and cooperating with team members
Moreover, key users must be able to explain complex issues in an understandable manner. Communication skills are relevant when it comes to dealing with software providers, IT consultants and end users.

Personal requirements of key users

The ideal key user has certain character traits that help them to meet the professional and social requirements of the role. Employees are suitable as key users when they are energetic and flexible. Most importantly, they should be open to change and innovation. By being open to how processes can be optimised, key users contribute to a smooth adoption of the digital automation tool. Key users need to be convinced of the value the automation software will add to the purchasing department.

All these personal characteristics, social skills and professional competences contribute to the key users being accepted and held in high esteem by teammates. The ideal key user is recognised as a knowledge carrier and competent contact person in his or her department and can therefore mediate between management, staff and the software provider.

The right key user leads to a successful automation project in purchasing

To conclude, it is not only necessary to choose a key user, but it is also important to choose the right key user for a software project. The ideal key user combines a profound understanding of the business processes with IT affinity, didactic skills and an openness to innovation through automation. These competences ensure that the key user can meet all expectations and successfully support the automation project in purchasing.

Webinar: Auftragsbestätigung-en automatisieren

Video ansehen

Pfleiderer Case Study

Learn how Pfleiderer successfully digitised its procurement through process automation.

Watch the video

Return to blog
November 16, 2022
Procurement automation project: Why you need a key user
Trending articles

Procurement automation project: Why you need a key user

Implementing procurement automation software is necessary for operational purchasing departments to stay competitive and resilient. Manual tasks are time-consuming and hinder procurement teams to reach their full potential. It is common for teams to resist change; introducing a new software solution can lead to push back from employees, who often need to be persuaded of the benefits.

Purchasing departments can be reluctant to determine a key user for the software project. However, having a key user is of great value since they act as an interface between the purchasing department and the software provider. The work of a key user is important for the success of both the implementation and the solution itself.

Share:

What is a key user?

A key user is an employee who specialises in a product or software and is considered the primary contact person for all questions, problems or trainings that relate to it.

In purchasing, they play a key role in the introduction of new processes and software solutions. In procurement automation projects, operational buyers often assume the role of the key user. When implementing an automation software in operational procurement, key users support the process by representing the professional interests of their division or department. Their tasks include supporting the definition of the new system’s scope of services, accompanying the introduction process, encouraging the adoption of the software among colleagues, and support colleagues after the go-live.

What tasks do key users perform?

Key users accompany the entire automation project in operational purchasing and have a wide variety of tasks during the different phases:

Analysis phase

Key users help to define the scope for improvement in the purchasing department by formulating the goals and requirements of the automation software.

Netfira offers a checklist for defining software requirements that support enterprises in specifying users’ goals, IT requirements, business requirements and more.

The software selection checklist supports companies in defining goals that meet the SMART criteria and selecting the right procurement automation software.

Key users are also involved in the market analysis; they obtain product information through direct contact with potential software providers and review case study materials.

Negotiations

Since key users are often part of the analysis phase, know the existing systems and what functionalities the automation solution should have, it is not uncommon for them to join the negotiations.

Development of the rollout strategy

After choosing a software solution, key users are also part of the process of accessing the initial needs and developing the rollout strategy.

Implementation phase

In the implementation phase, key users are indispensable. They ensure that requirements are implemented correctly from a technical point of view. Furthermore, they carry out functional tests and give feedback to the project and management teams on a regular basis.

Training phase

Key users are responsible for designing training concepts and training their team members who will work with the procurement automation software.

Go-live

Key users actively accompany the go-live.

After the go-live

When using the procurement automation solution, key users stay the first point of contact for questions and problems. They collect ideas for improvements and thus contribute to the further development of the automation project.

What functions and roles do key users have?

Usually, key users fulfil several functions and roles in a company.

Key users are specialists in their field. They are experts in using the systems and know all processes. They can provide input and offer insight to the challenges in operational procurement like manual document processing on a daily basis.

As ambassadors, they have two functions: On the one hand, they communicate the underlying idea of the automation software as well as the motives and goals of the department management or executive board to the service provider. On the other hand, they are ambassadors for the purchasing department and the users when communicating with management for they know and understand the problems and challenges.

Key users take on a central role as testers. They test both beta versions and new versions of the software before they are rolled out in the purchasing department. That way, key users ensure that the automation tool meets the needs of the organisation. Therefore, they are always in direct contact with the software provider to give feedback.

As trainers, they design training concepts and can explain the functionality and operation of the procurement automation software to the team.

Key users act as supporters who can answer questions about the operation and use of the automation solution for purchasing.

As multipliers or corporate influencers, they increase the knowledge about the implemented procurement automation solution and its benefits. They play a vital role in promoting the new solution within the department and thus contribute to greater use and corresponding amortisation.

What are the benefits of having key users?

Appointing a key user has several benefits:
- Having a key user reduces the training effort. The key user receives a comprehensive training through the software provider and can relay the relevant learnings onto their team, who may not need to understand the full scope of the software.
- The speed of response is increased because a lot of questions can be answered directly by the key user.
- The service provider has a clear contact person so that the collaboration is always smooth and efficient.
- Purchasing benefits from a key user who communicates the needs and challenges in one voice and thus facilitates communication between departments.
Key users determine the success of a procurement automation software implementation

Whether a key user is determined in a procurement automation project or not, can heavily impact the outcome of the project. The benefits of key users when implementing new software should not be underestimated. They are experts in their field, influencers and a feedback channel to the management level. Key users enable smooth communication between all parties and support the adoption of digital automation tools on both a personal and technical level.

Global Purchasing Automation at Syntegon

Read here

Return to blog
November 3, 2022