E-Boda – Closer to real-time accounting
– Order-to-Cash automation case study –
Late payments and lengthy order fulfilment are key factors in finding a solution for automation, as this Order-to-Cash automation case study shows
E-Boda is a Black & White goods manufacturer and distributor from Romania. E-Boda covers most of the categories of electronics, from smartphones to electric hoverboards. With a revenue beyond 10 million Euro in 2017, E-Boda is an important player on the electronics market, selling to all major retailers, both online and brick & mortar.
With a small team of around 30 employees, searching for an Order-to-Cash automation solution was high on their agenda. In 2014 they were approached by the DocProcess team with a proposal to automate their Order to Cash process. They immediately saw the benefits: low chance of errors, no more manual tasks and payments received on time.
Order-to-Cash – a vital process for company growth
Order to Cash is the process that spans sales, delivery and payments for goods or services sold. It involves several sub-processes:
- Customer credit management
- Order management
- Order fulfilment
- Distribution of goods
- Invoicing & reconciliation
Managing the speed and accuracy of these processes – in other words, automating them – is key to company growth and cost reduction. Capgemini Consulting estimated that an electronic O2C process, with e-invoicing, reduced the cost associated to sending and processing documents by 65%.
The Aberdeen Group surveyed over 140 companies in Finance, IT, Business Development / Sales and Operations and assessed their pressures for driving improvements in the O2C process:
Life before automation
Before automating the O2C process, E-Boda’s employees captured and processed orders manually. These arrived in a variety of formats and channels: paper, pdf files, email, xls and had to be introduced manually in their ERP. For just a single retailer, E-Boda averages 500 orders per month, each with several SKUs. What made matters worse was that buyers requested orders per store department (essentially per product categories) and per store location. This generated massive amounts of data that had to be handled by various E-Boda employees.
Copy-pasting the data from the orders to the ERP took several minutes per order and several phone calls to clarify product codes or quantities.
On the invoicing side, before switching to e-invoicing, E-Boda had to wait for days before knowing whether an invoice was correct and accepted by the buyer. This led to delayed payments and poor cash flow forecasts.
Life after automation
DocProcess suggested to the manufacturer a full e-process of O2C. Orders would arrive electronically directly to E-Boda ERP. Sales managers would then approve the orders and confirm the order receipt. Once the merchandise is ready for shipment, the electronic dispatch advice is sent to the buyer’s stores for them to prepare in advance for the receipt. E-Boda then received the electronic receipt advice in their ERP and issued the e-invoice. All these documents and status messages are delivered electronically between E-Boda’s ERP and each buyer’s ERP.
The reduction in error rate was seen immediately. “When you have the customer service representative entering by hand, they enter in the wrong ship keys. They enter in wrong product code numbers or the wrong quantities,” says Marius Ungureanu, Key Account Manager with E-Boda. “It’s very easy to err and now, this has been eliminated.”
With the DocProcess P2P and O2C automation platform, E-Boda now benefits from:
Eliminating paper, printing and postage costs, as well as manual tasks and clarification emails and phone calls, led to a significant decrease in accounts receivables costs. Estimates amount to a 70% decrease in cost.
Faster sales cycles
What took minutes per order to process, now takes split seconds. Our DocXchange platform can process and inject documents in milliseconds, faster than any front-end robots can achieve.
Faster payments & improved cash flow forecasts
Orders, dispatch advices and invoices are validated against each buyer’s specific business rules, before they reach the buyer’s management systems. Thus, E-Boda can avoid making errors in documents that lead to rejected invoices and delayed payments.
Improved customer service levels
Processing orders and invoices correctly and timely keeps buyers happy – both the store managers, as well as the Accounts Payable staff. Overall, the relationship with buyers became more low touch on the processing part. This has allowed E-Boda KAMs to allocate more time for sales development, instead of fixing errors.
Order-to-Cash project steps
DocProcess starts an O2C project with a full assessment of the processes, tasks and documents exchanged between vendors and buyers. Within a week, our consultants can map out the current situation and hold interviews with finance, logistics and sales departments about their pain points and desired situation.
The next step is streamlining the O2C process, removing non-value added steps. Automating the wrong tasks only makes matters worse, faster. In this step, consultants also map out the business rules that all incoming and outgoing documents must comply with. For example, if there are buyers who only have access to a subset of the product portfolio or have a minimum order quantity requirement, DocProcess can configure the DocXchange robots to check these.
Received documents (orders, receipt advices) are audited in terms of type (paper, pdf, xls, xml etc.), format and incoming channel – then mapped to the desired format for the vendor’s ERP. This way, neither party needs to alter their processes or their technology.
Finally, an e-invoicing module is added in order to achieve the final goals of an O2C automation project: reduce DSO (Days Sales Outstanding) and reduce receivables processing cost.
The process of automating orders is gradual, as this Order-to-Cash automation case study shows. In 2014, order automation was still a novelty in inter-company operations. Nowadays, however, it is gaining ground in retail operations, banking, insurance and manufacturing, where lots of documents are exchanged between parties. Robotic Process Automation is an elegant solution for this purpose, especially RPA working in the backend, where transactions are lightning fast and need to account for both the buyer’s and the sellers validations.