Häufig gestellte Fragen
What exactly does Order-to-Cash (O2C) mean?
Order-to-Cash (O2C) refers to the end-to-end business process from the receipt of a customer order through delivery and invoicing to the fully posted incoming payment. The term covers all the sub-steps by which a company accepts an order, fulfils it, invoices it and collects the resulting money. In the ERP system, O2C is mapped as a continuous document chain in which sales, logistics and financial accounting build on the same master data. This makes O2C one of the central end-to-end processes by which the integration depth of a solution can be judged well.
Which steps does the Order-to-Cash process comprise?
A complete O2C cycle is typically divided into several consecutive phases: order entry including creditworthiness and credit limit checks, availability check, picking and shipping, invoicing, receivables management with dunning, and incoming payment and posting. Each document is derived from the previous one, so the order gives rise to the delivery note and invoice, and these in turn to the open receivable. In practice, several departments are involved, including sales, credit management, logistics and accounts receivable. The specific design of the individual steps depends on the industry, company size and the chosen ERP setup.
Which KPIs are measured in the Order-to-Cash process?
The most important key figure is Days Sales Outstanding (DSO), which shows how many days elapse on average between invoicing and incoming payment. In simplified form, it is calculated as the receivables balance divided by revenue, multiplied by the number of days in the observation period. A low DSO means a company converts revenue into liquidity more quickly, while a high value can indicate payment problems or process weaknesses. In addition, order lead time, the rate of automatically matched payments and the share of error-free invoices are frequently used, with sensible target values depending heavily on the industry and business model.
How can the Order-to-Cash process be automated?
Automation focuses primarily on the transitions in the document chain, for example through automatic order creation from webshops, marketplaces or EDI connections, rule-based invoice generation and automatic matching of incoming payments against open items. Recurring checks such as credit limit and availability controls, as well as tiered dunning, can be controlled via a workflow engine. What is usually critical for success is less the range of functions than the quality of the customer and article master data along with clearly defined approval and dunning rules. The achievable degree of automation varies considerably depending on the industry, company size and customising depth of the specific ERP setup.
What is the difference between Order-to-Cash and Procure-to-Pay?
Order-to-Cash is oriented towards the customer side and concerns incoming orders, outgoing deliveries and the resulting revenues and receivables. Procure-to-Pay is the mirror-image counterpart on the supplier side and extends from internal demand through purchase order and goods receipt to payment to suppliers. O2C thus affects the income and liquidity side, while Procure-to-Pay maps the expenditure side. Both are distinct from the periodic financial close, since Record-to-Report consolidates and evaluates the operational data from O2C and Procure-to-Pay downstream.
How does the e-invoicing mandate affect the O2C process?
Invoicing, as a sub-step of the O2C process, is directly affected by the German e-invoicing mandate. The obligation to be able to receive structured e-invoices has applied in the domestic B2B sector since 1 January 2025 without a transition period, while staggered deadlines apply to sending. From 1 January 2027, companies with prior-year turnover of more than 800,000 euros must issue e-invoices, and from 1 January 2028 all companies are obliged in principle. Only structured formats that comply with the European standard EN 16931 are considered legally compliant, such as XRechnung or ZUGFeRD from version 2.x in the EN 16931-compliant profiles; companies should have their specific obligations reviewed from a tax perspective in individual cases.