Order to cash
Order to cash (O2C or OTC) normally refers to one of the top-level (context level) business process for receiving and processing customer orders. Other top-level business processes include "Opportunity to Order", "Procure to Pay" (P2P), "Issue to Complete" (for manufacturing production) "Hire to Retire", "Concept to Launch" (for innovation and new product development) and "Sustain and Retain" (for customer service and support)
The context level processes are utilized in a number of ways by businesses such as business process reengineering, aligning enterprise architectures and IT solutions as well as "blueprinting" as part of Enterprise Resource Planning (ERP) system implementations such as SAP, Oracle, Microsoft Dynamics and NetSuite.
In many business models, a contractual relationship is established first via a Contract or Subscription. Orders are then received via different sales channels, such as phone, fax, email, internet or sales person. The contractual relationship is confirmed and the Orders are fulfilled through shipping and logistics. On completion of key events an invoice is generated and booked as Sales (subject to "Revenue Recognition" requirements). If payment has not already been received, the debt is recorded and pursued through dunning cycles until the funds are received. Order to Cash is completed by the Customer Care process (inquiries, requests and complaints).
If we consider the ERP system flow, this is typically categorized into the following nine sub-processes:
- Customer presence
- Order entry (creation of order / booking of order)
- Order fulfillment (physical and digital fulfillment)
- Customer payments / collection
- Cash application
- Deductions (If invoice short paid by customer)
- "Deduction - An important step of O2C process | Monetary Section". Monetary Section. 2017-12-05. Retrieved 2017-12-05.
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