I’ve helped dozens of companies shave weeks off their cash collection cycle by treating order-to-cash (O2C) as a set of discrete, fixable processes rather than a single “billing” problem. When invoices go out late, payments come in late — but more often delays are caused by poor orchestration across sales, billing, fulfillment and finance. Below I share three pragmatic fixes I use with clients that typically cut DSO (days sales outstanding) by 10–30 days within one quarter.
Why focus on three fixes (not 'optimize everything')
Most teams try to overhaul the entire O2C flow and get stuck in projects that drag on. I prefer compact, high-impact interventions that are easy to implement and measure. Each fix targets a common choke point that, once cleared, has a cascading improvement on speed of collection: faster invoicing, fewer disputes, and easier payment. You can layer them — implement one, measure, then add the next.
Fix 1 — Shift invoicing forward: send correct invoices within 24 hours of delivery
Late invoices are the most obvious source of slow cash. But the reason invoices are late is usually process friction: manual data handoffs, unclear acceptance criteria or billing-only-on-month-end habits. My rule of thumb: an invoice should be generated and sent within 24 hours of delivery/acceptance for one-off orders, or automatically on the agreed recurring cadence for subscriptions.
How I implement it:
- Define a handoff trigger — decide the single event that means “bill now” (e.g., product shipped with tracking confirmed, acceptance sign-off from client, or service milestone closed in CRM).
- Automate invoice generation — use billing connectors between CRM/ERP/fulfillment and your invoicing tool (examples: HubSpot → QuickBooks Online, Salesforce → Zuora, Stripe Billing for subscriptions). I prefer simple integrations first: Zapier or Make for lightweight flows, then native integrations for scale.
- Standardize invoice templates — include PO numbers, clear line-item descriptions, payment terms, and a one-line summary of the value delivered (reduces buyer confusion).
- Track SLA — measure time from trigger to invoice sent; aim for <24 hours. Create an alert if SLA breaches.
Immediate impact: invoices hitting the customer inbox sooner means the payment clock starts earlier. In one case I cut the average invoice lag from 6 days to 0.8 days and reduced DSO by 9 days within two months.
Fix 2 — Make it effortless to pay: consolidate preferred payment options and reinforce the ask
Even when invoices are timely and accurate, customers delay because payment is inconvenient, unclear or routed to the wrong person. Reducing friction here often shortens collection by weeks.
Steps I use:
- Offer the easiest payment methods first — bank transfer is common for B2B, but add ACH/SEPA, card, and payment links (Stripe, Adyen, GoCardless) so the customer can choose. Payment links embedded in the invoice (Stripe Invoicing, Xero/QuickBooks links) reduce the cognitive load.
- Provide a clear payment owner — the invoice should state who to contact if there’s an issue (name, phone, email). I’ve seen invoices stuck for weeks where the AP team didn’t know who approved the contract.
- Use progressive nudges — automated reminders 7, 3, 1 days before and after due date. Use increasingly specific language: “Reminder — payment due in 3 days,” then “Final reminder — account will be placed on hold.” Tools: Chargebee, Zuora, or even simple workflows in QuickBooks and Xero.
- Enable partial payments and payment plans — for large invoices, allow split payments or short-term installments. This often unlocks payment when customers are cash-constrained but willing to pay.
Practical KPI: payment method conversion rate (percentage of invoices paid via the frictionless channel you prefer). Increasing this from 20% to 60% typically reduces average payment time by 7–14 days.
Fix 3 — Reduce disputes and speed resolution: dispute triage + a ‘billing success’ SLA
Disputes are the slowest part of O2C. They consume finance time and create long tails in DSO. Rather than hoping disputes will resolve themselves, I set up a rapid triage and resolution loop with clear ownership and timelines.
How to set it up:
- Create a dispute intake form — simple fields (invoice number, reason code, supporting doc upload, desired outcome). Embed it in every invoice email and payments portal.
- Triage by reason code — categorize disputes as: pricing error, scope/acceptance, delivery/quantity, PO/mismatch, or payment authorization. Each gets an SLA and owner.
- Assign a single resolver — make one person accountable per dispute type (e.g., Sales handles scope questions, Ops handles delivery issues, Finance handles pricing discrepancies). Clear ownership speeds answers.
- Set a billing success SLA — e.g., 48 hours to acknowledge, 5 business days to resolve for simple disputes. Publicize these SLAs to customers and measure adherence.
- Close the loop in CRM — log dispute status on the customer record and make it visible to AR collectors so they know whether an invoice is collectible or in dispute.
Example outcome: by triaging and resolving small disputes within 5 days, one client reduced dispute-related receivables from 18% of AR to 6% — cutting DSO by nearly three weeks.
Operational playbook: 6-week rollout checklist
Here’s a concise checklist I use to implement the three fixes in six weeks. It’s designed for cross-functional ownership between Sales, Ops, IT and Finance.
- Week 1: Map current O2C flow, identify bottlenecks, pick the billing trigger event.
- Week 2: Standardize invoice templates and configure invoice automation; pilot 25 invoices.
- Week 3: Add payment links and preferred payment methods; update invoice emails and templates.
- Week 4: Build dispute intake form and triage process; assign owners and SLAs.
- Week 5: Implement reminder cadence and payment nudges; track payment method conversion.
- Week 6: Review KPIs, iterate on messaging and automation, and roll out company-wide.
Metrics to track (table)
| Metric | Why it matters | Target |
|---|---|---|
| Invoice lag (hours from trigger to invoice sent) | Directly affects when payment clock starts | <24 hours |
| Payment method conversion rate | Higher = lower friction | >50% |
| Average DSO | Ultimate measure of cash collection speed | Improve 10–30 days vs baseline |
| % AR in dispute | High values mean collection bottlenecks | <5–8% |
| Dispute resolution time | Faster resolution frees up cash | <5 business days for simple cases |
Common objections and quick responses
- “Automation is expensive.” — Start with low-code connectors (Zapier, Make) and native billing features in Stripe/Xero/QuickBooks. The ROI from reducing DSO often pays for automation in months.
- “Customers prefer invoices on a different cadence.” — Agree billing cadence in the contract, but still invoice promptly on that cadence. Fast invoicing doesn’t mean changing agreed terms.
- “We can’t resolve disputes fast because Sales is slow.” — Enforce SLAs and measure Sales’ responsiveness; include dispute resolution tasks in reps’ KPIs or tie them to commission holdbacks for larger deals.
If you want, I can draft a customizable invoice email template, a dispute intake form you can paste into your billing emails, or a sample Zap/Make scenario that connects your CRM to Stripe/Xero. Tell me which tools you use and I’ll adapt the templates to your stack.
