Order-to-Cash (O2C)

Order-to-cash (O2C) refers to the set of business processes that involve receiving and fulfilling customer requests for goods or services. It’s a complex process that spans the entire organization, from order management and shipping through invoicing and collections.

Why should the O2C process be optimized?

The O2C process spans multiple departments, from finance to warehouse management. Because of these intersections, it’s a process that’s prone to bottlenecks and inefficiencies. Multiple dependencies lead to high process complexity and a large number of process variants. Consider looking at these analysis criteria:

• The extent to which returns or credit notes occur. 
• Compliance with delivery deadlines.
• Whether and in what period of time the invoices for services rendered are paid by the customer (days sales outstanding).

Related Terms: Process Optimization, Process Strategy, Analysis