Order to Cash (also known as O2C or OTC) is a business process for receiving and processing orders placed by your customers.
When a customer makes an order, the business have a way to create the order, shipment and receiving payment. All the process including to complete this process included in Order to cash cycle.
Order to cash cycle includes Order entry, fulfilment, shipment, invoicing, Payment processing, Reporting and reconciling, and Accounts receivable / Accounts payable.
O2C activities touch many different departments within a company — inventory, supply chain management, labor, etc. Because of this, the O2C process has a significant impact on the business.
Order to cash functions also determine a company’s cash inflow and working capital.
Ultimately, Order to cash is one of the most important business processes because it helps businesses to forecast their income, monitor the sales of their products, and improve their inventory item management. It helps in
- Reduce costs and accelerate cash flow
- Resolve errors and delays
- Service customers faster and more efficiently
- Streamline the Order Management process by resolving inefficiencies like order submission delays, re-entries, duplicates, and backorders
- Resolve Bill-to-Cash inefficiencies such as quoting and invoicing errors, invoice delays, and using multiple disparate data sources.