OrdertoCash

Order to cash (O2C) is a set of business processes that encompasses the end-to-end lifecycle from receiving a customer order to realizing payment and recognizing revenue. It integrates sales, order management, credit checks, product fulfillment, shipping, invoicing, accounts receivable, and cash application. The goal is to deliver products or services efficiently while maintaining good customer experience and healthy cash flow.

Key stages include order capture, credit approval, order fulfillment, logistics and shipping, invoicing, payment processing, cash application, collections and dispute management.

Common performance indicators include order cycle time, order accuracy, days sales outstanding (DSO), cash conversion cycle, perfect order rate, and revenue leakage.

O2C relies on enterprise systems such as ERP, CRM, and EDI. Automation and analytics improve throughput and accuracy, with cloud-based platforms, robotic process automation, and AI-driven credit scoring and exception handling.

Benefits include improved cash flow, reduced DSO, higher order accuracy, and better customer satisfaction. Challenges include data quality, process fragmentation across departments, credit risk management, compliance, and reconciliation of payments.

In B2B and B2C contexts, order complexity and customization vary. Best practices focus on standardized processes, a single source of truth, end-to-end ownership, effective exception handling, KPI monitoring, and ongoing process optimization.