The Invoicing cycle



In an older post (http://goo.gl/jXGmOi) I have discussed the general benefits that a cloud ERP could bring to the enterprise, even to the SMB space. I have given some examples of specific business functions and how they can be transformed or at least assisted by the web technology that the cloud ERP inevitably brings with it.
In this post I will focus more on one specific business process, that of the customer order placement and order fulfillment and show that not only is a cloud platform (such as a SaaS product) able to optimize the whole process but also enhance customer experience and finally bring tangible benefits to the enterprise, such as faster invoice payment and reduction of open receivables.

Let’s look at the following table which illustrates a typical order placement/order fulfillment process. In separate columns I show how the detailed steps are completed in a legacy in-premise, “behind-closed-doors” ERP and how the process is changed by an extrovert web-based system.
Step
Traditional ERP
Web-based ERP
Browsing of inventories and prices
Printed catalogues, telephone calls, sales rep calls, B2B sales portal (if it exists) (*)
All traditional methods plus through an integrated B2B sales portal inside the main system. See here for more information: http://goo.gl/jw1qRi
Order placement
Telephone calls, sales rep calls, B2B sales portal (*)
Enhanced by an integrated B2B sales portal inside the main system
Order confirmation
Telephone calls, or none
Automated notifications. Issuing of a pro-forma invoice for the customer’s acceptance.
Close the process from within a web-based workflow system (Customer accepts the charges and there is a digital signature for that)
Picking and shipment
Internal process. No major differences here. For Supply Chain enhancements, we’ll talk another time!
Order tracking
B2B sales portal (*)
Enhanced by an integrated B2B sales portal inside the main system.
Invoice sent through email for faster processing by the customer.
Goods delivery
Invoice and any other documents received with package
Only dispatch note received with package. Electronic equivalent of it may have been sent in previous step.
Order acceptance
No process today
Powered by a workflow inside the web-based system.
Clock starts ticking for the invoice payment…
Invoice payment
Customer pays and vendor sees the payment in the bank statement or is not notified at all! Accounting is browsing through the statement and is trying to match payments with invoices
Customer “signals” invoice payment through automated workflow.
Collections process
Traditional calls, letters, sales rep visits etc. Letters probably produced by the ERP, if functionality exists.
Through an integrated Collections system. Web technology can offer automated emails, SMS or even customer portal with capabilities of self-service by the customer.
(*) at this step, an additional B2B sales portal means additional costs, duplication of data, interfaces “hassle”, maintenance costs (software, I.T. salaried costs etc.). Most SMB’s cannot bear such costs. For B2C sales, this can be done through the “e-shop”, if it exists.
From the above, I think it’s obvious how the whole process can be optimized, shortened in time and require less interaction between the parties. In that same context I think that the whole customer experience is enhanced and this ultimately may result in more customers, more loyalty and bigger sales figures.
We’ll discuss more tangible benefits in a future post. Stay tuned…

Comments

Post a Comment

Popular posts from this blog

How does web-based ERP enable Growth Hackers in new ways

Image
Growth hacking unfolds along two parallel lines. The first one is enabling rapid experimentation across marketing channels using new methods that are easy to implement and fast to pay-off (otherwise, they may be abandoned). The second one is engaging customers in several ways in order to keep them in close distance from the organizations sales “reality” and activity. For example, making sure that new products are instantly known in the customer base, interesting news are immediately propagated in the community etc. In this post I’d like to focus on the latter and discuss how a web-based ERP/CRM integrated solution can decisively assist customer engagement and community building . My intention is to show that SaaS business solutions do not just offer some “technology upgrade” in the organization or solely some cost benefit but can also play a significant role in the growth efforts of the organization . 
Read more

Data migration to SaaS

Image
In the organization’s journey from an on-premise Business Application setup to a Software as a Service one, one of the key factors of success is data migration . Of course, one starts with basic questions like “do I want or need to move to the cloud?”, “Which is the best SaaS solution for my case?”, “Does it address my special requirements?”, “am I content with the reporting/BI capabilities that it offers?” etc. But having answered all of the above, you should take into consideration the data migration issue. This post will point out some very significant issues around this subject, which you need to address and examine; probably in close co-operation with the SaaS vendor of your choice, before accepting their financial proposal and start the journey.
Read more

How can a web-based ERP boost your invoicing process

Image
In an older post ( http://goo.gl/jXGmOi ) I discussed how web-based or cloud Financial ERP can help you unlock new possibilities for your Business Processes. The basic argument there was that an open system (like a cloud-based system is, by definition) could involve your customers in a specific business process (like sending a Sales Order, posting a comment that needs subsequent action from within your CRM etc.). The reaction I got from a number of readers was that new best practices could be devised and applied in a very important, so to speak, business process which is of everybody’s interest, big or small: that of invoicing the end-customer. We shouldn’t forget that many small and medium enterprises are focusing their I.T. operations on Accounts Receivable, inside which the invoicing cycle represents a significant part. Therefore, in this post I’d like to focus on this specific issue: how can your invoicing change when you’re using a web-based Financial ERP . 
Read more