Trends & Challenges in European Order -to-Cash

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SSON: How does the order-to-cash market place perceive Trintech? 

Paul Byrne: With the increasing move to SSC models and more focus on strengthening individual financial processes  such as OTC, P2P and R2R, the market is more aware of the solutions we offer across the office of finance. This is particularly true where an organization is taking a holistic view across a number of processes simultaneously.

SSON: What have the main challenges been in distinguishing Trintech from other order-to-cash solution providers, particularly in the current environment?

PB: Everyone working in finance realises the importance of managing working capital effectively. It is crucial for companies to know their cash position is in real time. A lot of solutions show this in a cached manner and that is one way we differentiate.  The highly flexible sophisticated matching rules in our solution drives up the match rates allowing management to focus on the exceptions thereby resolving issues quicker and getting to a net position faster than our competitors. As our OTC solution is part of a suite of financial operations software, we are able to put all transactions in context for senior management (CFO) to take a view across the organization on all processes.

SSON: What do you perceive as the main challenges in Order-to-Cash for most organisations?

PB: The order-to-cash cycle presents many challenges for companies, including:

• High cost of processing
• Managing cash flow and meeting *DSO objectives
• Customer experience
• Lack of visibility across the entire OTC processes

Organizations OTC management are constantly being pressured to improve margins, reduce costs and supply meaningful information back to the business faster. This is in addition to the ever growing regulatory environment. These pressures will induce more organizations to seek solution partners to improve efficiency and help provide better visibility across the whole process as organizations seek to manage profitability at the customer level on a more proactive basis. Also, treasurers are looking to the OTC chain to free up cash tied up in working capital sooner, particularly in a tough economic environment. This will result in greater scrutiny of variance items, and dispute resolution will need to be quicker.

SSON:  What are the biggest hurdles for Order-to-cash solution providers right now?

PB: In spite of the gains to be had, there are obstacles preventing many companies from taking advantage of these solutions. The obstacles are primarily organizational in nature. Companies are generally structured functionally, which makes it difficult for a company to see all the benefits of investing in an OTC solution. For example, a financial officer may see the significant benefits of improved working capital management across a company, but does not have the budget, authority or personal incentive to bring about change within the organization. This is particularly true where decision making is diversified to business units and co-ordination of effort across business units can be difficult. This also impacts on the ability to get organisations to free up the skilled resources to work on more value add activities.

SSON: Other than Order-to-cash, do you think Trintech may diversify into other types of solutions?

PB:  Trintech invests heavily in the development of solutions that help the office of finance do things better. We have grown from a provider of transactional operational reconciliation of sub-ledgers to complex GL Reconciliation through to automating the  financial close, reporting and compliance functions.  We have over 600 customers and we listen to them and respond to their requirements to add functionality that they need.   As an example of our responding to our customer’s requirements we have recently developed a solution that is embedded in our reporting module which allows XBRL tagging for SEC Filings, all at the click of a button. 

SSON: What trends do you predict for order-to-cash going within the next 5 years?

PB:  Credit departments will continue to be challenged by upper management. Most critically, a sizable majority will be asked to improve performance with smaller staffs, or to do more without the hope of additional staff resources, despite ongoing corporate growth.

Similar to other financial processes the aim will be ’straight through processing’. Companies will be looking at measuring customer payment performance better, through use of scorecards, etc.

Finance functions will be more adept at overseeing receivables and looking at even more innovative ways to finance those receivables.

Going forward, companies are also more likely to transcend the various internal organizational obstacles so that they can share data across the organization more efficiently.

*(days sales outstanding)

Paul Byrne serves as President of Trintech Group (Nasdaq: TTPA). He has led Trintech’s emergence as a leader in the Governance, Risk and Compliance market over the last three years. He is a former Chief Financial Officer. Previously, he worked for PriceWaterhouseCoopers and is a Fellow of the Institute of Chartered Accountants in Ireland.