What is O2C cycle in SAP SD?

What is O2C cycle in SAP SD?

Order to Cash (OTC or O2C) is an end-to-end business process in the SAP Enterprise Resource Planning (ERP) software that integrates finance and sales and distribution. The business process begins with the client inquiry and ends with delivery and payment made for the goods or services.

What is O2C cycle?

The order to cash cycle, often abbreviated to O2C or OTC, is how your business receives, processes, manages, and completes customer orders. This means handling all aspects of the sale including shipping the items, collecting the payment, creating invoices, and reporting on the end-to-end process.

What are five main documents in shelf to cash cycle?

The main document on this stage is called SAP outbound delivery and it helps to perform various activities related to shipment….Shipping Activities in SAP Order to Cash Process

• Picking and confirmation (Transfer orders)
• Packing.
• Arranging transport and shipment (Shipment document)
• Posting goods issue (Material documents)

What is OTC process in SAP SD?

Order-to-Cash is an integration point between Finance (FI) and Sales (SD). It is also known as OTC or O2C in short form. It is a business process that involves sales order from customers to delivery and invoice. The process starts when a customer inquires for an inventory item (finished goods for a company).

What is AR in billing?

Lesson Overview. The Accounts Receivable (AR) processes in AFIS cover the billing of customers for goods or services rendered, processing collection activities, and recording the receipt of money owed.

What is PTP in SAP?

PTP: Procure to Pay: This means procure raw materials from Vendors (based on purchase order raised) , Goods receipt, Invoice Verification and make payment to Vendor. This sequence of activity is called Procure to Pay.

What is the typical order of process flow in O2C?

The eight steps in the order to cash cycle can be lumped into four major processes: order entry, order fulfillment, billing, and payment. Depending on the industry, the order of these processes may change, but the overall process works similarly for each business.

Why is O2C important?

The importance of an efficient O2C is because the quicker a company can transform their raw good into a salable product to be received and billed to the customer the less cash will be tied up in the various stages of inventory, which will then provide more resources needed to further invest in its growth and prevail …