Order to Cash is a process, which starts from an order & complete at Payment receive. So that’s why it’s called Order to Cash Process.
We have following Steps in O2C Process as under:-
Inquiry from Customer or Request for Quotation
Quotation Submission to Customer
Receive Purchase Order (Additional)
Issue a Sales Order
Packing of Material
Shipping or delivery of Goods
Billing or Invoicing
Payment Collection
Customer Evaluation and Reporting
Now we will discuss all the steps one by one
Inquiry from Customer or Request for Quotation
O2C cycle start from inquiry, in this step we receive inquiry from customer for any materials/services in which we deal. This is the first step in O2C Cycle. Generally customer asks for Quotation first.
Quotation Submission to Customer
On the Basis of inquiry we will submit a quotation to customer
Receive Purchase Order
If Our customer select our organization, on the Basis of our Quotation. Customer will issue a Purchase Order or we can say we will receive a Purchase Order from our customer
Issue a Sales Order
After receipt of Purchase Order from Customer we issue a Sales Order to Customer
Packing of Material
On the Basis of Sales Order, We will check the availability of product and do the packing of material for Delivery
Shipment and Transportation or Delivery of Goods
After Packing, we will make the necessary arrangement for Shipment /Transpiration and Issue/deliver the Goods to Customer
Billing or Invoicing
Sales Department will raise an Invoice to Customer as per terms agreed in Sales Order
Payment Collection
As per the payment terms agreed in sales order, we receive the payment from customer
Customer Evaluation and Reporting
As per the scheduled time we will evaluate our customers (Customer Aging Report) and Report to Management. This process will help to improve our services and increase our customers