Order-to-Cash (OTC or O2C)
Order-to-Cash (OTC), also sometimes referred to as Order-to-Cash Cycle (O2C), is a crucial business process encompassing all the activities involved in processing a customer order and collecting payment. It essentially tracks the journey a sale takes, from the initial moment a customer expresses interest to when the company receives the final payment.
What is Order-to-Cash (OTC or O2C)?
Order-to-cash (OTC or O2C) is the end-to-end process from receiving a customer order to collecting payment. It includes order management, invoicing, payment processing and accounts receivable. Efficient O2C processes enhance customer satisfaction, improve cash flow and reduce the risk of errors and disputes.
Optimizing the order-to-cash cycle is often one of the last items on a company's go-to-market checklist. However, OTC problems tend to be among the first encountered as a company scales. These issues can hinder growth and profitability.
To properly refine and optimize the order-to-cash process, businesses can leverage an Order-to-Cash Maturity Model. This framework helps assess a company's current O2C maturity level and provides a roadmap for improvement without excessive costs.