Key insights and trends to transform your order-to-cash processes

The order-to-cash (O2C) process, covering the entire journey of an order from when a customer places it to when the company receives the payment, is one of the most important parts of a business. It affects cash flow, customer satisfaction, and a company’s growth.

We recently surveyed organisations across the UK & US about their O2C systems and processes to identify where their pain points were. You can read the full report here - we discovered that many organisations still rely on outdated O2C systems that fail to address invoice errors, long payment collection times, and expensive processes. The survey also highlighted that these challenges are causing even more pain as more companies shift to subscription models.

Here, we aim to offer some insights into how companies can improve their systems to build financial stability by first looking at how O2C systems are currently falling short.

Common challenges in order-to-cash processes

Invoice errors and long payment cycles

Let’s take a fictitious packaging manufacturer, “FreshWrap Solutions”. With an outdated O2C system, FreshWrap finds that over a quarter of its invoices have errors due to manual inputting. These mistakes are causing customers frustration and delaying payments, and this is having a serious impact on cash flow. FreshWrap isn’t alone.

Our survey highlighted that 52% of companies have similar struggles with invoice accuracy, often needing to correct 26% or more of their invoices. For some companies, this figure is over 50%.

Now imagine if FreshWrap took 11 days to send out an invoice after the order was dispatched, and the errors are only spotted when the invoice is received, delaying payment even further. According to our survey, this isn’t far from the truth - delays in generating invoices are another major issue, with 34% of companies reporting similar delays. Pair that with another statistic: 51% of businesses have to wait over 60 days to collect payment, and we can see how huge cash flow problems are created.

Slow move to digital solutions

Our survey showed that only 60% of businesses are managing the majority of their invoices digitally, and many companies still use paper-based invoicing. So, let’s use FreshWrap as our example again. If FreshWrap generates a paper invoice 11 days after the order is dispatched and puts it in the post, it would be subject to yet more postal delays, therefore slowing down payment even more.

Switching to electronic invoicing, ideally with automated systems that handle everything without needing human input, could save significant time and reduce manual errors. According to our survey, 58% of companies said fewer than half of their orders are processed without human intervention.

The growing challenge of subscription revenue

Subscription models promise predictable, recurring revenue, but they also introduce new challenges for order-to-cash processes that were originally built for one-off transactions. The recurring nature of subscription billing means that slow, manual, or error-prone O2C processes quickly become bottlenecks for growth. Systems need to account for variable pricing based on usage, frequency, or other factors. Therefore, they must be flexible, updating monthly based on whether customers added extra items or paused their subscriptions.

With 57% of organisations now relying on subscriptions for more than half of their revenue, these challenges are common. Billing errors lead to frustrated customers, cancelled subscriptions, and lost revenue.

The cost of inefficiencies

Handling all these issues manually costs time and money. In fact, 60% of companies said the process cost of their O2C was more than 5% of their total revenue, with 9% saying it costs over 10%. For a company that generates £1 million a year, that’s £50,000 a year spent just to process orders, invoices, and payments. 

Companies can reduce costs and improve customer satisfaction by allowing customers to access account data and manage their own subscriptions. According to our survey, 59% of companies offer customers some self-service options, such as checking order history or downloading invoices. This approach helps to reduce work for support teams and gives customers a better experience.

Moving forward

By adopting digital invoicing, automating order processing, and creating customer portals that provide real-time account access, organisations have the potential to see fewer errors, faster payments, and better customer satisfaction.

The future of O2C

As subscription models continue to grow, businesses that rely on slow, manual order-to-cash processes will continue to struggle with payment delays and higher costs. Moving to modern O2C systems isn’t just about reducing errors or shortening the time you get paid. It’s a way to position your company for long-term success and competitiveness. Embracing digital, automated systems means companies can grow more easily, keep their customers happy, and stay financially healthy.

If any of the above strikes a chord, and you would like to discuss your order-to-cash systems or subscription service, let's talk - contact us today!