Tweet me!Order-to-Cash – an Infoborders Sample Process
Business Scenario-
You are a senior manager with a medium size supplier. You are on your way back from a meeting with a major customer. The last couple of days you have dedicated a large portion of your time to gather all the information for this meeting. The pricing contract is due for renewal and you were hoping to ask for a modest increase in pricing. Since the start of selling to this customer the sales volume has increased, your warehouse is reporting shipping on-time, your IT is reporting no issues with your electronic data exchange, accounts receivable has noticed an increase in the age of the accounts receivable, and this is one of the items you were planning to bring up.{jcomments on}
The meeting did not go exactly as you had planned. Instead of the modest price increase the customer is asking for a price reduction to compensate for the additional cost they are incurring due to compliance violations, in fact they have a long report of various violations over the last six months. According to them the increase in age of your accounts receivable is directly related to the violation of certain business rules, and apparently you should have received notification of these errors via the EDI interface or your EDI provider. If only you had a way to validate your customer's claims and have some way of knowing what is happening – you need visibility into your supply chain, and you need it today. Further, you think, you need a way to give other management in the company similar views.
For a long time companies had a limited view into the supply chain processes. Over the last several years many companies have worked to gain more visibility into internal processes, in fact this was often the main reason why companies upgraded to ERP solutions from SAP and Oracle. Today these organizations are still facing the challenge of gaining visibility into their supply chain network (A network which includes customers, vendors, carriers, 3PLs, etc.).
Welcome Infoborders to the list of much-needed supply chain solutions! Infoborders, provider of one of the industry’s most innovative and complete solutions is able to deliver this functionality in a straight forward SaaS package. Infoborders stands out, away from your ERP and outside your EDI environment to measure and report on how your processes correlate (Jibe) with your trading partners. When deviations and exceptions occur, you are notified. This solution also enables you to manage reverse score carding, sales analysis reports!
Infoborders works by monitoring electronic messages you already exchange with your trading partners and applying sophisticated business rules that span multiple documents. These business rules are grouped together to cover business processes. A process could include everything from the 850 through 820 for one of your retail clients (850, 855, 856, 810, and 820 – or any other documents).
Order to Cash – Sample scenario
Let's look into how this works by considering a simple order-to-cash process. When documents such as orders are received by Infoborders, an instance of a business process is started. Infoborders monitors the process all the way to completion. But Infoborders can monitor not simply at the order level but all the way to the item level, which is very important if your order can generate multiple shipments or invoice or if you what to track short shipments.
Now the received order is processed in the client's back-end system and some lines are shipped. An Advanced Shipping Notice (EDI 856 ASN) is generated by the vendor and sent to the retailer. At this point Infoborders receives a copy of the ASN, compares it with the information on the orders and applies applicable business processes for this stage. Discrepancies between the order and ASN are identified and applicable notifications are sent to appropriate employees. But Infoborders can also monitor for events that should have happened but did not (Report by exception). For example, if the order has a ship-by date a notification messages will be generated and sent to the appropriate recipients alerting that a deadline for shipping this particular order is approaching. Configuration of who, how often and under what conditions reports are received is easy to setup or change on the fly in Infoborders.
With the goods shipped your ERP generates an invoice for the shipped goods at the end of the day which is again sent electronically to your customer. Again a copy of this message will be sent to Infoborders and again business rules are applied. Infoborders will also monitor for functional acknowledgements sent by your customer (this is standard message in EDI) and will be able to immediately react if an application advice is generated by your customers to let you know that there was a problem processing the invoice on their end. As with any other processing error the whole process will be placed into an error state and someone looking for the status of the order will notice those specific invoice errors, just as they can notice errors or warnings generated by any other business document or processing step. This ensures that AR does not wait for the invoice to become past due to be notified of the problem. If corrections to the invoice are made and new invoice sent Infoborders will notice this and reapply the business rules, changing the state of the process as required.
If the customer or bank is able to send notification of electronic funds transfer, Infoborders can validate the amount received all the way back to the order, against the shipped quantity and the payment amount specified in the invoice. As with all other steps, notification can be generated or details can be added to on-line reports or viewed on an on-line dashboard.
The order-to-cash process can be further enhanced by including carrier related documents like shipment status. There is no limit to the types of processes you can add.
And this is just the beginning. While we have found that much of the business processes can be easily be monitored by capturing electronic messages exchanged between trading partners there are times when more data is needed for even more complex business rules. In this case Infoborders can be configured to use data found in other systems, databases, excel spreadsheets, emails and other sources to make monitoring and reporting on business processes more complete.
Why does it make sense? I met a guy last year whose company had more than $2,000,000 in charge backs they were working through. We have all met, know of or maybe are responsible for dealing with getting these charges off the books. This solution, for that reason alone makes sense to me, but there are many others which should also be considered.
Here are examples of other errors easily monitored by Infoborders:
• Acknowledgement past due
• ASN rejected by receiver's application
• Delivery outside the requested delivery date
• Duplicated documents
• Reference missing in a document
• Incorrect use of preferred LTL or TL carrier
• Invoice for product that was not shipped
• Invoice/ASN rejected by partner
• Missing carrier code/reference number,
• Multiple shipments on a single PO
• Multiple shipments to a single location
• Order overdue for shipping/billing
• Order shipped after the cancellation date/deadline
• Order shipped before the earliest allowed time
• Shipment is scheduled for delivery after customer's deadline
• Shipped location does not match the order
• Shipped quantity is less/more than requested
• Shipping date on invoice does not match ASN
• Shipping window missed
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Learn more about Infoborders by visiting http://www.infoborders.com/
