Gaining new customers for your business is an immense accomplishment and requires a team effort from numerous departments within your company. However, the hard work does not stop once you’ve closed the deal or when a customer makes an order. What comes next after establishing a new customer? The process of Order to Cash.

Order to Cash, also referred to by OTC or O2C, is a set of business processes of receiving and fulfilling customer requests for goods and services.

order to cash Simply put, Order to Cash is the actions required to be able to deliver the products and services from customer orders. The Order to Cash process focuses on order fulfillment which involves numerous strategies such as inventory management, operations, and production. Order to Cash begins once a customer order is received, then strategizing your supply chain on how to get products out of stock or manufacturing, preparing it for shipments, and delivering it to the customer. With Order to Cash, logistics is a very key component. The final stages of O2C include invoicing the customer, collecting payments, and recording the revenue appropriately.

Order to Cash is an essential process, but what makes it different from Quote-to-Cash? Despite some similarities, Quote-to-Cash is a larger set of business processes that span from a customer’s intent to purchase a product or service, all the way through the collecting and realization of revenue. O2C greatly differs from QTC in the following ways:

QTC Ten Steps
O2C does not include the processes of configuration, pricing, or quoting

The processes of Order to Cash do not include any part in the configuration of the product or service, the creation of a price, or the sending of a quote to the customer. All of these things are done prior to the O2C process. Configuration, pricing, and quoting (often referred to as CPQ) are the first stages of the Quote-to-Cash process. Figuring out the best fit of product and service bundles for potential customers require generating the right price and accurate quotes – aspects that play a major role in the outcome of the deal sizes of your sales and the duration of your sales cycle.

Contract Lifecycle Management is tied to other processes

Contracts are the backbone of your business, and although the O2C process uses data from customer contracts, the creation and negotiation of contracts happen beforehand outside of the typical order to cash cycle. Quote-to-Cash on the other hand, incorporates all contract management processes including, contract creation, negotiation, execution and even revenue management and recognition. Effective contract management in the QTC process can result in shorter contracting cycles, an increased acceptance rate, higher compliance, and lower administrative costs.

Order to Cash hones in on order fulfillment and how to effectively deliver on customer orders, but it is only one piece of the pie. Quote-to-Cash is a much larger process and OTC comes into play down the line.

To learn more, download the Ultimate Guide to Quote-to-Cash.

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