What is Order-to-cash?
Order-to-cash (O2C) is the end-to-end process from receiving a customer order through fulfillment, invoicing, collection and cash application.
In more detail
The stages are order entry and validation, credit check, fulfillment, invoicing, invoice delivery, collections and cash application. Delays pile up at handoffs: orders waiting for credit approval, invoices held until shipment is confirmed, remittances that do not say which invoices they pay. Common KPIs are DSO, invoice accuracy, dispute rate and the share of cash applied automatically. Automation tends to start with order intake (emails and PDFs into the ERP) and cash application, because both are high-volume and rule-bound. Procure-to-pay is the buying-side mirror of this process. See our order-to-cash blueprint for the full map.
Example
A wholesaler receives purchase orders by email. The system reads each one, checks it against the price list and credit limit, creates the sales order and flags anything off. Weeks later it matches remittance advices to open invoices.