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Order to Cash (O2C) Cycle: Key Processes, Controls, and Metrics

TaxGuru•
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Summary

AI-Generated
  • The Order to Cash (O2C) cycle is a vital cross-functional business process that integrates sales, operations, logistics, finance, and customers from inquiry to cash collection.
  • Key stages include customer inquiry, Sales Order creation, invoicing, and payment application, with critical controls necessary to prevent errors and disputes.
  • Metrics like Days Sales Outstanding (DSO) and invoice accuracy measure the effectiveness of the O2C process, highlighting its impact on revenue and cash flow.
  • A well-coordinated O2C process not only protects revenue but also enhances customer satisfaction and operational efficiency, driving sustainable growth.

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