Order to Cash

Definition

Order to cash (OTC) is a business process that encompasses the entire lifecycle of a customer order. It begins with the customer placing an order and ends with the customer paying for the order. OTC is also known as the sales order process, order fulfillment process, or revenue cycle. The OTC process is a critical component of any business, as it is the primary source of revenue. It is important for businesses to have an efficient and effective OTC process in order to maximize revenue and customer satisfaction.

Example

Let's look at an example of the OTC process. A customer places an order for a product or service with a company. The company then processes the order and prepares the product or service for delivery. The customer then receives the product or service and pays for it. The company then records the payment and the order is complete.

The OTC process can be broken down into several steps. The first step is order entry, which is when the customer places the order. The second step is order processing, which is when the company prepares the product or service for delivery. The third step is order fulfillment, which is when the customer receives the product or service. The fourth step is payment processing, which is when the customer pays for the order. The fifth and final step is order closure, which is when the company records the payment and the order is complete.

Why it Matters

The OTC process is an important part of any business, as it is the primary source of revenue. An efficient and effective OTC process can help businesses maximize revenue and customer satisfaction.

An efficient OTC process can help businesses reduce costs by streamlining the process and eliminating unnecessary steps. It can also help businesses improve customer satisfaction by providing a seamless and efficient experience.

An effective OTC process can help businesses increase revenue by ensuring that orders are processed quickly and accurately. It can also help businesses reduce errors and improve customer service by providing accurate and timely information.