"Order to cash" (O2C or OTC) normally refers to the business process for receiving and processing customer sales.

It follows"Opportunity to Order" and covers business-to-business (B2B) and business-to-consumer (B2C) sales. The term is most prominent in the design and improvement of Enterprise Resource Planning (ERP) systems such as SAP and Oracle. In many business models a contractual relationship is established first via a Contract or Subscription. Orders are then received via different sales channels, such as phone, fax, email, internet or sales person. The contractual relationship is confirmed and the Orders are fulfilled through shipping and logistics.On completion of key events an invoice is generated and booked as Sales (subject to "Revenue Recognition" requirements). If payment has not already been received, the debt is recorded and pursued through dunning cycles until the funds are received.Order to Cash is completed by the Customer Care process(inquiries, requests and complaints). If we consider the ERP system flow, this is typically categorized into the following eight subprocesses:

Customer presence Order entry (creation of order / booking of order) Order fulfillment (physical &digital fulfillment) Distribution Invoicing Customer payments / collection Cash Application Deductions(If invoice Short Paid by Customer)

A customer orders some items from your company by creating a sales order (T codes: VA01, VA02, VA03, Tables: VBAK, VBAP etc). Your company decides to deliver the items ordered by the customer. This is recorded by creating a outbound delivery document (T Codes: VL01N, VL02N, VL03N,Tables: LIKP, LIPS etc). Once the items are available for sending to the customer, you post goods issue which reduces your inventory and puts the delivery in transit. This will create a material document. You will post goods issue using VL02N but the material document created will be stored in tables MKPF, MSEG. You will then create shipment document to actually ship the items. (T codes: VT01N, VT02N,

VT03N, Tables: VTTK, VTTP etc). You finally create a sales billing document. (T Codes: VF01, VF02, VF03, Tables: VBRK, VBRP etc). This will have a corresponding accounting document created that will be in BKPF, BSEG tables. When customer pays to your invoice, it will directly hit your AR account in FI. You will have to remember that these are not a required sequence. Sometimes,you may configure your system to create a SD invoice as soon as you create a sales order or you may not create a shipping document at all. This is the position where Functional Consultant would come into picture and study the company's order to cash process and configure the SAP system to do so.