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Perhaps you would like to see your business grow faster than present, find a better way to manage inventory, or have a smarter ERP system to manage and integrate the resources across your various departments. Or maybe you are hoping to generate greater profits by boosting employee productivity.

Operational efficiency will always be a key ingredient in bolstering any business’s bottom line, and software can play an elemental role in reaping such business rewards.

For wholesale distributors and manufacturers, order fulfillment software is critical to streamlining the order-to-cash cycle, maximizing sales order accuracy, as well as significantly improving fulfillment efficiency, and ultimately elevating customer experience and brand loyalty.

What is order-to-cash?

Order-to-cash (abbreviated as OTC or O2C) in wholesale and manufacturing can be viewed as the entire lifecycle from an order’s placement in the field through successful completion of payment. The beginning stages of OTC also include the agreement between the business and the retail store buyer of a number of conditions, including payment terms and production and delivery times.

Upon successful product delivery, adherence to negotiated terms, and the buyer’s satisfaction, the wholesaler or manufacturer will invoice the buyer and the cycle will end with the debt paid in full.

What is order fulfillment software and how does it affect OTC

Digital automation has become the name of the game in modern-day B2B transactions, and is essential in the fulfillment of orders taken by B2B sales reps in the field and of B2B e-commerce orders made by retail store buyers. Thanks to the internet, emerging mobile technologies, and the increased globalization they facilitate, wholesale and manufacturing businesses of all sizes are dependent on order fulfillment software to scale their business.

Order fulfillment software automates the order fulfillment process, ensuring that a sales order is delivered with the highest level of accuracy and least amount of lead time necessary.

Common capabilities of an order fulfillment system

There is a minimum you should demand from your order fulfillment software, and it can be measured through their common capabilities. There are particular criteria that should be met as a bare minimum for your business.

Order fulfillment kicks in once a sales order has been approved for fulfillment. If you are a brand manufacturer, there are 4 order fulfillment approaches to consider, based on the types of products you manufacture:

  • Made-to-stock (MTS) or build-to-forecast (BTF) - for standardized products that are mass-produced in anticipation of future demand  
  • Build-to-order (BTO) or make-to-order (MTO) - for standardized products that are produced only when ordered
  • Assemble-to-order (ATO) - for products that are assembled to order from a set number of possible components
  • Engineer-to-order (ETO) - for products that are engineered to the customer’s specific requirements

The order fulfillment approach will determine how customer billing is performed and integrates with your accounting system to generate the financial transactions required. In so doing, you will keep track of which customers have paid for products and services rendered in an effort to minimize days sales outstanding (DSO)

Best practices for maximum profitability

Integrating your order fulfillment software with your enterprise resource planning will go a long way to ensure that your data and processes are connected across your company departments: from sales taking sales orders in the field, through order fulfillment, warehouse management, and accounting, to shipping and collection.

You will also want to choose a solution that is cloud-based and built to support mobility. These capabilities allow traveling or remote salespeople to access necessary order fulfillment information with ease, and allow them to focus on sales tactics and driving business goals rather than being hampered by administrative or logistical obstacles.

Web-based order fulfillment delivers additional benefits in providing your buyers with online visibility into their accounts, so that they can track shipment status and movements. In so doing, you minimize their dependence on customer service (i.e. reduce costs!) and provide buyers with the benefit of self-sufficiency and 24/7, real-time access to order information (i.e. improved customer experience).

Order fulfillment software is key to elevating customer satisfaction and streamlining your order-to-cash cycle. It must, however, be integrated with sales order management and accounting software in order to realize its full business value.

About The Author

Stacey Woods
Stacey Woods
Stacey Woods is the Senior Business Development Manager at Pepperi. She has extensive experience in B2B sales and understands the many benefits that can be gained by automating and syncing the different sales channels in a company.