The order-to-cash process (O2C)

Step 1: Handling Customer Inquiry (Sales Rep)

Receives inquiries via phone, email, or web; identifies the customer and logs the inquiry for tracking

Step 2: Creating Sales Quotes (Sales Rep)

Prepares sales quotes with fixed terms/discounts; performs ATP (Available-to-Promise) check to ensure availability .

Step 3: Creating Sales Contract (Sales Rep)

(Optional) Creates a sales contract with fixed terms based on an approved quote .

Step 4: Creating Sales Orders (Sales Rep)

Quote is converted to an order; system performs final credit limit check and releases to logistics .

Step 5: Creating Down Payment Request (Sales Rep)

(Optional) For high-value orders, a request is issued and recorded before final invoicing.

Step 6: Processing Payments (A/R Accountant)

Manages incoming payments (transfer, direct debit, card); matches bank statements to open invoices

Step 7: Initiating Outbound Delivery (Warehouse Mgr)

Checks availability and allocates stock; releases the order to logistics .

Step 8: Processing Outbound Delivery (Warehouse Operator)

Picks, packs, and ships goods; posts a "Goods Issue" which reduces inventory and records COGS .

Step 9: Processing Inspections (Quality Engineer/Inspector)

Final quality checks performed before goods leave the warehouse to meet specifications .

Step 10: Creating Customer Invoices (A/R Accountant)

Delivery triggers automatic invoice requests; invoices can be combined for multiple deliveries

Step 11: Processing Receivables and Payments (Account receivables and payments)

·       SAP manages all incoming payments (manual or automated).

·       Payments can be by bank transfer, direct debit, credit card, etc.

·       Bank statements are uploaded and matched to open invoices.

·    Once cleared, revenue and cash balances are updated in accounting.

Business Value of O2C

Automates pricing/delivery, provides margin visibility, and increases customer satisfaction through reliable ATP.