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Order to Cash (O2C)

Order to Cash (O2C)

Order to Cash (O2C)

The abbreviation O2C stands for the order-to-cash process in a company. This process refers to the ordering process of a customer for goods or services. The O2C process thus includes, among other things, the receiving of a customer order, the administration of customer requests and the final completion of the ordered services or the delivery of the purchased goods as well as their billing.

Order 2 Cash - O2C

Why should the O2C process be analysed?

The process usually takes place across different departments, from the finance department to warehouse management. Due to the resulting process intersections, the process is increasingly prone to bottlenecks and therefore inefficiencies. Furthermore, this is an indicator for a very high process complexity and a large number of process variants.

It is also important to consider the extent to which returns or credit notes affect the process and may cause deviations and increase bottlenecks. Compliance with delivery deadlines is also an important analysis criterion to ensure that the process flow complies with the rules. An equally important question is whether and in what period of time the invoices for services rendered are paid by the customer (Days Sales Outstanding).