Order-to-cash is procure-to-pay seen from the seller’s side. When a retailer, distributor or dealer buys from you, its purchase order starts your O2C process. Customer service, fulfillment, shipping, billing and credit teams each handle part of it, and the customer judges you on how well those parts line up.
A typical O2C flow runs through these steps:
- Order capture: a purchase order (EDI 850), API call, online order, spreadsheet or emailed PDF
- Confirmation with a PO acknowledgment (EDI 855)
- Fulfillment and shipping, with an advance ship notice (ASN, EDI 856)
- Billing with an invoice (EDI 810)
- Cash application, often using remittance advice (EDI 820)
Errors anywhere in O2C reach the customer directly. A wrong quantity, a missed ship date or an invoice that doesn’t match the order leads to credits, disputes, deductions and slower cash. Orders that arrive by email or phone add manual entry and raise the cost to serve for those accounts, which is why many sellers track perfect order performance by customer.