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…