Unlocking Cash Flow for COO: How to Cut Your DSO by 20% with Digital O2C

Hello Business Leaders,

Imagine this: your company's revenue is soaring, orders are pouring in, and your operations are running smoothly. Yet, the cash flow statements tell a different story—working capital is stretched, and liquidity is tighter than it should be.

Sound familiar? You're not alone. Many COOs grapple with this paradox: How can a thriving business feel cash-starved?

The answer often lies in one overlooked metric—Days Sales Outstanding (DSO).

Why DSO matters to You as a COO

DSO isn't just a finance KPI; it's an operations problem too. It directly impacts your ability to reinvest in growth, optimize procurement cycles, and maintain supplier trust.

High DSO is Killing Your Agility

Here’s some hard-hitting data to frame the challenge:

• Global DSO Average: 60 days (Source: PwC Working Capital Study 2023).
• High-Performing Companies: 30-40 days DSO
• Cost of Late Payments: $3 trillion globally locked up in receivables, as per Atradius Research.
• Impact: Every additional day in DSO increases working capital requirements by 1%.
• Potential Benefit: Cutting DSO by 20% can unlock millions in trapped cash, freeing you to drive operational excellence.

Now, think about this—what would it mean to your business if you could reduce your DSO by even 20%?

DSO isn't just a finance KPI; it's an operations problem too. It directly impacts your ability to reinvest in growth, optimize procurement cycles, and maintain supplier trust

But How this Benefits You!

When you cut DSO by a significant %, you’re not just speeding up cash inflow—you’re unlocking a cascade of benefits:

• Operational Agility & Improved Liquidity: Freed-up cash can fund critical initiatives like capacity expansion or supply chain digitization.
• Optimize Inventory: With better cash flow, you can hold safety stock without hurting liquidity.
• Stronger Customer Relationships: Streamlined, dispute-free processes build trust.
• Operational Efficiency: Save hundreds of hours in manual work.
• Better Decision-Making: Real-time insights into cash flow and customer behavior.

• Strengthen Supply Chains: Timely supplier payments reduce risks of stockouts and delayed production runs.
• Reduced Stress on Teams: Automated processes let your teams focus on value-added tasks rather than chasing payments
• Expand Capacity: Free cash enables CAPEX investments in advanced machinery or plant expansions.

The Reality: What’s Causing the Bottleneck?

I have observed multiple COOs mentioning: "We ship on time, invoice immediately, but payments still take forever. Collections are chaotic, and disputes keep piling up."

Here’s what was uncovered as the root causes:

1. Manual Siloed Processes: Siloed systems and a lack of visibility across O2C.
2. Disjointed Communication: Sales, finance, and operations working in isolation create delays in resolving payment disputes.
3. Inefficient Credit Management: Approvals for new customers or extending credit limits often take too long, causing delays in order processing.
4. Unresolved Customer Disputes: Disputes over quantity, quality, or freight often escalate due to siloed communications between sales, operations, and finance.
5. Lack of Visibility: Operational Leaders are bombarded with multiple Reports and Dashboards but none of them provide the key Insight for Decision Making.

How can you Drive O2C Excellence in this scenario

Let’s put operational terms into action and focus on achieving results using DSO Optimizer Suite

If you wish to explore on any of the below Solution, verify the Solution fitment or create your transformation Blueprint and Roadmap you know whom to connect !!

• Customer Enablement Platform: Empowers customers with self-service capabilities for order placement, tracking, and inquiries, improving engagement and satisfaction.. Implementing a digital Order-to-Cash (O2C) platform can boost revenues by 1% to 3% annually, enhance customer satisfaction, and reduce costs -BCG
• Process Automation & Optimization: Streamlines workflows and automates repetitive tasks, reducing errors and accelerating order fulfillment and invoicing cycles.. Automating the O2C process can reduce manual interventions by up to 90%, leading to faster order fulfillment and improved operational efficiency
• Advance Analytics: Leverages predictive insights to identify risks, enhance cash forecasting, and ensure proactive decision-making across the O2C cycle. Utilizing advanced analytics in the O2C process can help reduce Receivable delays and identify anomalies thereby improving overall process efficiency.
• System Integration & Data Harmonization : Unifies disparate data sources to ensure consistent and accurate O2C process data, improving overall visibility and efficiency. Integrating systems within the O2C process can improve accuracy across the entire process, leading to better cash flow and optimized working capital.
• Advance Payment Ecosystem: Introduces flexible payment methods and real-time payment tracking, improving cash flow and customer relationships. Implementing a collaborative approach in the O2C process can decrease cycle times and eliminate common bottlenecks, leading to improved cash flow.

Sources: Invensis, DZone, Corcentric, Versapay

Your Turn: Take the First Step

Let’s face it: a manual, outdated and Siloed O2C process won’t cut it anymore.

Ask yourself:

• Are you ready to stop firefighting and start proactively managing your cash flow?
• What would freeing up millions in working capital mean for your growth plans?

Digital transformation isn’t optional—it’s the difference between thriving and merely surviving.

Quick Win for COOs:

Kickstart your journey with a Digital O2C Assessment. In just 2 weeks, identify your biggest improvement areas and unlock the potential for millions in working capital.

Here is the Link to Download your complementary "DSO Assessment Heatmap" - (A High level assessment to kick-start your journey)

For COOs in manufacturing Industry, cash flow is the oxygen that fuels operations. Lowering your DSO isn’t just about improving liquidity—it’s about giving your operations the financial freedom to thrive.

So, let connect & understand: What’s holding your O2C process back? Let’s talk about how we can drive operational excellence and cash flow improvement hand in hand.

Unlock your cash flow potential—one digital step at a time.

Thankyou!!

Manish Kumar Sah

O2C Transformation Specialist | Driving Results through Digital Innovation |

Manufacturing Digital Transformation

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