Order to Cash (O2C) is a key business process that refers to the entire order processing system from order creation to cash receipt. Here’s a streamlined overview:
1. Order Management: The customer places an order which is captured and validated by the system. This step ensures that the order details are accurate and complete.
2. Credit Management: For customers with a credit line, the company checks if their credit status permits further purchases; this helps to mitigate financial risk.
3. Order Fulfillment: The warehouse team picks, packs, and ships the order. This includes inventory management and logistics to ensure timely delivery.
4. Invoicing: Once the product is shipped, an invoice is generated and sent to the customer, detailing the amount due.
5. Accounts Receivable: This involves tracking outstanding invoices and managing collections. Payment terms and methods are agreed upon and monitored.
6. Cash Application: When the payment is received, it is matched with the open invoice, and the transaction is recorded in the accounting system.
7. Reporting and Analytics: Data from the O2C process is analyzed to evaluate performance, identify bottlenecks, and improve efficiency.
In essence, O2C integrates various departments to ensure a seamless flow from customer order to revenue realisation, promoting operational efficiency and customer satisfaction. Blueringed Consultants work alongside your teams to establish the workflow and introduce a quality assurance framework to maximise efficiencies. Find out more, here.