Order to Cash (O2C)
What is this?
Order-to-Cash (O2C) is the end-to-end process of selling goods/services to a customer and receiving payment.
It connects:
- Sales (SD)
- Logistics
- Finance (FI)
Why it exists?
Organizations need a structured way to:
- Capture customer demand
- Deliver products/services
- Bill customers
- Collect revenue
High-Level Flow
- Customer inquiry / quotation
- Sales order creation
- Delivery / shipment
- Billing (invoice)
- Payment received
O2C represents the full customer journey from order to payment. :contentReference[oaicite:0]{index=0}
Detailed Flow
1. Sales Order
- Customer places order
- System records demand
2. Delivery
- Goods picked, packed, shipped
- Inventory updated
3. Billing
- Invoice generated
- Revenue recognized
4. Payment
- Customer pays
- Receivable cleared
Business Objects
→ Business_Partner (Customer role)
→ Material
→ Invoice
Key Takeaway
O2C is: → Revenue generation process
If this breaks: → Cash flow breaks