With the high-volume transaction activity found in the majority of Order-to-Cash (O2C) environments, the use of workflow technology to streamline operations is an approach more companies are embracing. A recent Peeriosity PeercastTM in the Accounts Receivable research area featured a large pharmaceutical company that has developed a powerful workflow solution to simplify their O2C operation.
ARLINK is the name of this customized internally-developed solution for automating the processing of cash and handling deduction resolution utilizing SAP Workflow. ARLINK sits on top of SAP, but accesses the SAP functions for posting cash, creating deductions, issuing credits, creating letters, performing some offsets, and sending resolution detail to a customer via fax.
The process is essentially paperless, unless paperwork is required by a customer, and uses a virtual folder for each item as the filing system. All documentation is created within SAP or from an outside source. Debit memos are received from the customer, checks are received from the bank and the documents are “filed” in Documentum, their archiving system. No paper files are maintained.
The following is a summary of how the workflow process takes place:
- ARLINK utilizes several inboxes within the SAP Business Workplace
- The type of item determines the inbox where it resides
- As each item is completed and transferred to the next inbox, documents are added to the virtual folder automatically
- The work flows from Accounts Receivable to the Deduction Team, and then to the customer
Several examples were also provided by the feature company of the various screens their team uses in ARLINK, including cash application and deduction processing.
The result of creating and implementing this custom workflow solution has been a significant increase in both productivity and overall quality for the Order-to-Cash operation at this company.
There were also two iPollingTM questions associated with this Peercast. The first one looked at where the most significant opportunities exist for increased automation in the Order-to-Cash process area. Interestingly, of the individual process areas that were identified in the poll, Customer Payment Processing was the most popular response, with 30% of the companies selecting that option. Also with 30% of the response were companies that felt that these automation opportunities existed across Order-to-Cash and not particularly within one specific process.
The second poll addressed the topic of what is the biggest challenge that companies are facing as they attempt to increase automation within their O2C processes. Not surprisingly, a lack of resources (33%) and a lack of standardization (27%) were the two most popular responses, with both often cited as ongoing issues not only for Order-to-Cash, but other major process areas as well.
Some of the poll comments made by Peeriosity member companies include the following:
Manufacturing Member: We have already automated the collection process and are in the process of automating our billing and cash application. I would consider cash application the bigger opportunity right now. Our biggest obstacle is the ability to replicate in other regions of the world where we have transactions.
Real Estate & Construction Member: Starting review of process initially with cash allocation.
Wholesale & Distribution Member: Our cash application for the most part is automated. It is the deduction transaction posting that occurs during cash application and the follow-up on those deductions that could benefit from further automation.
Manufacturing Member: All areas offer opportunities, but we are currently focusing on cash application and reducing paper across all areas.
Computers & Electronics Member: We are looking into automating our cash applications (wires) on a global scale.
What is the status at your company in carrying out further automation within the Order-to-Cash process areas? Would a solution, similar to that of the Peercast feature company, provide further improvements in this key process area?
Who are your peers and how are you collaborating with them?
“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.
Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultants or vendors permitted. To learn more about Peeriosity, click here.