What Is OTC Order Management?
In spite of its daunting-sounding name, OTC order management is a fairly commonplace process that takes place in most sales-based businesses. In a digital sales environment, OTC stands for order to cash. Put simply, OTC order management involves the entirety of the order processing system. This covers everything from the moment when the order is received up until the point where payment is made and logged in your books.
In simpler terms, OTC refers to the business processes that involve fulfilling customer requests (such as selling goods or services) in exchange for money. So, what are these processes exactly? Let’s have a look.
Breaking down the order to cash process
As outlined above, the order to cash cycle starts when an order is received and ends when the money is recorded in the general ledger. As it turns out, a lot of things happen between these two points. Scroll down as we go through all the different processes in OTC order management.
1. Order placement
This is where the entire cycle begins. It sounds simple enough, but this step can actually bring serious headaches to a business. An inefficient OTC order management system will inevitably result in delays in order submission and sending out incorrect items to the customer.
As everyone with an online business knows, amending an error is very expensive. It’s better to listen to the old saying – prevention is better than cure. Ensure that your order management systems are solid to avoid getting into trouble.
2. Order fulfilment
At this point, you’ve successfully received the order and sent out an order confirmation email to your customer – well done! Now it’s time to inform your warehouse and distribution teams about the order so they can pick it and pack it. Easy, right? Well, only on paper. The truth is that liaising with your distribution team to ensure the smooth running of operations can be tricky.
That’s why we recommend having a solid order management system (OMS) in place. A good OMS will put you in the driving seat by providing you with a one-stop solution for all your operations needs. Thanks to this kind of software, your warehouse team will be automatically informed when an order is made – meaning that you’ll get your orders out faster and with increased accuracy.
3. Order shipping
Just like picking and packing in the previous step, order shipping can also be automated. When it comes to shipping, the biggest advantage of automation is increased customer satisfaction. As soon as the order is sent out, your customer will receive an email with tracking information. In this day and age, when customers want to be in the loop 24/7, this is an essential service for an online business to provide.
4. Invoice payment and recording
The order to cash cycle doesn’t end when the seller receives the money. In fact, the customer will usually make payment at the very beginning of it – that is, when the order is placed. Once this is done, the customer – or the services of their preferred payment option such as PayPal or their bank – will provide you with an invoice. This invoice must be recorded in the general ledger by your accounts team – but first, they need to check that the paid amount is correct.
Once your accounts team green-lights the received invoice, the OTC cycle comes to an end.
OTC order management best practices
OTC order management sounds simple on paper – and, in all fairness, it can be a simple process. However, companies often make things more difficult than they should be by implementing inefficient processes. There are a lot of drawbacks to stifling your OTC order management cycle with unnecessary processes – and not a single advantage.
To make things easier for you, we have come up with a small list of OTC order management best practices. If you’re doing all of these things, it means that you’re on the right path.
1. Integrate all your systems
We cannot stress this enough – having several software solutions running at the same time is bound to cause problems. This is because most computer applications are not programmed with foreign software in mind. Having several non-native applications running independently at the same time can only bring one thing – extra work.
You don’t want your employees to spend half their shifts inputting data from one solution to another. If you want to shorten the order to cash cycle, implement an order management system that integrates your sales data with your accounting information.
2. Automate tasks
Let’s stop pretending that spending hours in front of an Excel spreadsheet is fun. Having a software solution in place that takes care of the most painstaking tasks will allow your employees to tackle more productive jobs. That productivity boost is paired with a drastic reduction in human error – which in turn will increase customer satisfaction.
In our experience, automating invoicing processes goes a long way toward implementing smarter ways of working. You can easily do this with sales reporting software. Even better, this solution will also equip your sales reps with key data to improve their performance.
3. Invest in an ERP system
The pen and paper days are over. If you want to compete in the current sales environment, you need a software solution that’s up to scratch. Cue enterprise resource planning (ERP), which will boost your sales revenue while allowing you to cut down on unnecessary overhead costs.
Thanks to ERP software, managing day-to-day business activities such as OTC order management has never been easier. Apart from automating cumbersome manual processes, an ERP solution such as Profit4 will streamline all your operations.
It will establish a firm link between back-end operations – such as stock control – and all your book-keeping processes. That means waving goodbye to making sales numbers add up in an Excel spreadsheet. Your ERP solution will hold all your sales information – from monthly sales targets to profit per product.
Bringing you closer to success
A smooth-running OTC order management process is a stepping-stone to a competitive business. At OGL Software, we can lay that stone for you. With our sales order management and ERP software, we’ll equip you with a one-stop solution for all your business needs – from warehouse management and stock allocation to sales processes and finance.