Order to Cash

Order to Cash (O2C or OTC) refers to the entire set of business processes involved in receiving and fulfilling customer requests for goods or services. The cycle begins when a customer places an order and concludes when the payment is received, recorded, and reconciled. It serves as a comprehensive view of a company's sales and collection activities, connecting sales, operations, and finance teams.

A well-managed O2C cycle is critical for maintaining healthy cash flow and ensuring accurate revenue recognition. It encompasses multiple stages, including order management, credit checking, fulfillment, shipping, invoicing, accounts receivable management, and payment collections. The efficiency of this process directly influences key financial metrics such as Days Sales Outstanding (DSO) and the overall cash conversion cycle.

Optimizing the order-to-cash process helps businesses improve liquidity, reduce bad debt, and enhance customer relationships. By streamlining workflows and integrating data across departments, organizations can accelerate cash collection, improve forecast accuracy, and better manage their working capital.