SAP Order To Cash Process
SAP Order to Cash Process is an integration between SAP Finance & Sales Distribution. Order to Cash is also known as O2C or OTC. In SAP OTC sales process starts with a sales order and ends with cash payment by customer.Order to cash is an entire process from the sales order generations to the transaction completion through cash payment by the customer or client. SAP O2C process is a very important process in SAP Enterprise Resource Planning Software, i.e SAP ERP software.
In the SAP ERP system, the Order To Cash Process describes the sales side means supplier view is SAP SD (Sales & Distribution) of a company.From receipt of an order to completion of transaction stages, first sales order generated by the buyer or customer of the particular company side.
On the next stage customer or buyer receives an order confirmation. As an outcome, the sales order is processed and a shipment of product or goods is sent with a corresponding notification of delivery as shipping confirmation.After that, on the next level at receipt of the products or goods that is an actual delivery, the company receives a confirmation of receipt.
Challenges facing for Order to Cash Process:
SAP Order to Cash or O2C is a business process that covers the complete cycle of ordering and delivering goods or services to customers, invoicing, and receiving payments.
Process of OTC
Pre-Sales Activity
Processing Order
Order Completed
Billing
Some of the challenges facing the Order to Cash process included
Inaccurate Data
Errors in data such as pricing, delivery addresses, or product codes can cause delays in processing orders, resulting in unhappy customers.
Communication gaps
Communication breakdowns between departments, such as sales and finance, can lead to discrepancies in order details, which can affect the timely processing of orders.
Manual Processes
An Order to Cash manual process can be time-consuming and prone to errors, leading to delayed invoicing and payment processing.
Non-standardized processes
Differences in processes and procedures across different regions or business units can cause inconsistencies in the Order to Cash process.
Customer service issues
A lack of transparency and communication with customers, as well as delays in order fulfillment and invoicing, can lead to customer dissatisfaction and lost sales.
Cash flow management
Issues with invoicing, payment processing, and credit management can negatively impact cash flow, which is critical for business operations and growth.