Order to Cash Automation

8 Practices for Better Order to Cash Automation with CPQ Software

Product companies should think beyond just the cash transaction and reach deeper into the organization.
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What is Order to Cash?

Order to Cash Definition:

Order to cash, also known as OTC or O2C, is the business process for receiving and processing customer orders and payments for goods and services.

Inherently in this seemingly simple but in realty quite complex business process, there are many hidden opportunities for automation for manufacturing companies.

It’s time to streamline your sales to manufacturing processes with a solution made just for you.

Learn how manufacturers are gaining a competitive advantage by introducing CPQ to complex product ordering and manufacturing.

Where does Order to Cash automation typically happen?

Order to cash is comprised of a complex business workflow that depending on the industry and size of the company will span many individual, people, teams, and systems during a transaction. Often transactions require at least pre-sales, order processing, order fulfillment, and billing and collection activities.

typical order to cash process
A typical order to cash business process



Where can manufacturers beef up automation to help expedite and control the product and customer lifecycle?

Most companies are seeing Order to Cash as an opportunity to introduce digitization to ordering, invoicing, collections, and other front-office activities. This puts systems like CRMs, ERPs, and PLMs in the forefront of managing customer and orders and their related data and processes.  However, product companies should especially be looking to see how these front-of-house people, processes, and technologies can better interact and influence the rest of the product lifecycle, through engineering and to fabrication.

More connected manufacturing organizations can also capitalize on the value of their other external data sources, configuration and product libraries, CAD drawings, cut sheets and assembly documents all together to drive an enlightened end-to-end digital manufacturing process.


Should Order to Cash be looked upon differently by Manufacturers?

In one word, ‘yes’.

Most companies have a straightforward quotation stage, but manufacturers struggle because estimating can be a complex, multi-faceted and iterative process. When product companies don’t have good management during the Configure, Price and Quote steps of their product lifecycle, any Order to Cash process will be highly manual and error-rich.


What happens in a typical Order to Cash process and how can the right CPQ help product companies?

order to cash automation
Order to cash process enhanced with best-in-class CPQ


Below we’ve mapped CPQ functionalities to the phases of the order to cash process by number to indicate possible enhancements using automation.


During pre-sales and ordering activities you are gathering a rich set of information that can be used during your product lifecycle.  The “C” in CPQ stands for configuration.  If done properly with an advanced CPQ rules engine the product configuration experience and the resulting data output is all controlled by the same set of logical rules

(1) Contacts & Companies

Connecting important customer data (CRM) about preferences, past orders, and more to facilitate a more guided and personalized configuration and ordering experience

(2) Inquiry

Many companies are seeking an omni-channel approach to selling complex products that might originate from their sales people, their distributors, or even direct from the customer.

(3) Quotation

Manufacturers seek a simple, compliant, fast, and visual configuration of a product, including dynamic pricing updates – for a customer by a sales representative, distributor, or by the customer themselves on an external website. The CPQ platform should have real-time integration with the CRM and ERP in order to send back and forth customer and estimate data, line-item SKUs, inventory, pricing, descriptions, and visual renderings of product configurations.  Until the order is final a joint CRM/CPQ solution should allow for proper change management for both the product configuration and pricing and other details.

Many product companies deploy (C)onfiguration, (P)ricing, and (Q)uotation for better control over product estimates (and potentially product visualization) but do little else to help with the rest of the Order to Cash process.


Order Processing

(4) Sales Order

More connected product companies enjoy a solution that sends the final order and product configuration details, line-item stock, and all other related information directly to the ERP and/or PLM system.  This ensures an immediate and error-free transition of the order from sales to begin engineering and production processes.


Order Fulfillment

(5) Inventory

Companies want direct and real-time integration between their CPQ and ERP/PLM so estimates and orders flowing in from the CPQ will respect available inventory and alter inventory as orders are finalized

(6) Manufacturing and Assembly

Product teams get excited when assembly instructions can be auto-generated, aggregated and put in the right order, then published or printed in order to support the picking and/or assembly of the chosen configured product

(7) Packing & Shipping

Packing lists can be created from the chosen configuration



(8) Invoicing

Once finalized, product configuration data can be sent to the ERP by the CPQ to trigger invoice creation and auto-population of the order right down to the line-item detail as well as pricing, discounts, shipping, and taxes

Accounts Receivable / Collections

There aren’t many meaningful contributions CPQ can make at this stage as these last few financial activities are outside of the scope of CPQ functionality, and typically handled by accounting staff and ERP systems.



CPQ solutions will have reporting localized to its functions, but a more globally-aware business intelligence tool will be needed to grab and aggregate data to allow for reporting spanning so many systems.


See how KBMax CPQ can augment your overall order to cash strategy.

Check out a demo of KBMax