Order to cash, also referred to as O2C, OTC, or the quote-to-cash cycle, is the term used to describe the set of businesses processes for receiving and completing a sale. The order to cash cycle begins when an order is placed and ends when payment is received and that payment is recorded in the General Ledger. Keeping in mind the process may change slightly from one company to the next, the order to cash cycle when broken into stages and sub-processes looks something like this:

  • Quote request and delivery: when a customer requires a quote and approval prior to making a purchase
  • Order entry: when the customer purchases an item or schedules a service
  • Order fulfillment: when that item/service is delivered
  • Invoicing: when accounting creates and delivers an invoice to the customer
  • Invoice collection: the process of collecting the money owed by the customer
  • Cash application: when the payment is recorded in the general ledger

The process seems simple, but each sub process has its very own set of challenges, inefficiencies, and other issue that can slow the final and arguably the most important stage of the process, getting paid.


Think about what all the order-to-cash cycle involves- it’s how the entire business runs! Streamlining your order to cash process is critical to improving and maintaining profitability, customer retention, and overall business growth. A slow or broken process anywhere along the cycle can slow everything and cause significant damage to your bottom line in a variety of ways.

One example would be a customer leaving your for another business because you’re having trouble with stage three of the cycle, order fulfillment. If you are consistently late or sending incorrect orders, they will eventually get fed up and quickly find another product/service provider. Or during stage five when a customer has given a few excuses for not paying their invoice and has now gone 120 days past due, leaving your business scrambling to find another way to pick up on the money you’ve lost.

There are many opportunities for things to go wrong throughout the order to cash cycle, but we find that a majority of businesses struggle most toward the end of the cycle, collecting the money owed to them. Usually companies have a tough time getting paid not because the customer is disputing an invoice or avoiding payment, but because the company does not have the visibility into accounts receivable and the tools they need to quickly identify late invoices and take proactive steps to rectify the situation. Think about it- you use ERP and CRM to help you with the beginning of the cycle, why not implement software to help you close the loop and get your money to the bank?


Since ERP and CRM software options usually fall short on invoice collection, accounts receivable software has stepped in to automate that process. An automated accounts receivable software has the ability to send automated email. Automated email will send out invoices, welcome letters, collection letters, reminder emails and past due notices automatically to any customer that falls within certain parameters set by your company. If your business wants to send a first collection letter to all customers 30 days past due, a rule is set in the system and those emails will be sent automatically to just those customers that are 30 days past due. Accounts receivable software also offers the option of using an online bill pay system. Online bill pay allows customer to enter a secure payment portal top pay their invoices with credit card or ACH payment, speeding up payment and less work for the collections representatives. Among many other functionalities, accounts receivable software helps to close the gaps in the order to cash cycle that are crucial to collecting payment.