How to Improve Your Order to Cash Process2021-10-13T00:16:23+00:00

Updated July 30, 2021


Today's technology allows for a streamlined order to cash process through the proper use of integration software, which connects your business apps.

Order to cash, or "O2C," is a key business process for any company. Doing it right means serving your customers efficiently, eliminating errors, and collecting accurate data.

To optimize your order to cash process, you need:

What is Order to Cash?

Order to cash is a business process that encapsulates the order processing system. Categorized as a "top-level" or "context-level" process, order to cash includes a customer's order, through the payment, when the receiving company can qualify it as cash.

It follows other core processes such as branding, marketing, and sales. Some companies, particularly software companies, prefer the concept "lead to cash," which extends the beginning of the process to the moment they've secured a lead, or potential customer.

Integration helps companies excel at O2C and all other business processes, making up a company's automation strategy. For the sake of clarity, this article will cover just the order to cash process.

8 Steps in the Order to Cash Process

Order Management

When a customer places their order, it triggers several actions for your customer, your systems, and your teams. Your order management system (OMS) notifies the customer that their purchase is confirmed, it registers and organizes the order, it syncs data to your inventory and fulfillment tracking, and sends your teams the info they need.

Credit Management

At this step, your customer's credit is automatically evaluated for approval, based on the terms and limits that you offer. A secondary benefit of this step is that you can evaluate the financial health of your customers for possible upsells.


Your shipping or service department comes into play at this stage, whether you're delivering a physical product, a software, or a subscription. This step relies on item management automation, which will help to avoid products being out of stock. Your teams and systems are once again notified with the status and details of the order.


For physical goods, this is the delivery of the product. Along with shipping comes an estimate of the arrival date, tracking of the delivery, and a system for automatically flagging delays or other issues.


An invoice is then sent to your customer, containing all the necessary information about the order. This is done mostly by email, but you may also need to trigger your system to send a printed invoice. Your invoicing system should capture data such as costs, credit terms, order date, and shipping date.

Accounts Receivable

The order data is sent to your accounting system, where you can keep track of errors, overdue invoices, or automatic payments.

Payment Collection

At this step, the customer pays for their purchase, and the information is put into your accounts receivable records and general ledger. This helps your teams and systems know what has and hasn't been paid. Common errors at this stage include failing to record the payment, asking customers for a repeat payment, and making inaccurate cash estimates.

Reporting and Data Management

All the information from each of your steps gets shared with your internal data tools. Well-integrated software is critical to ensuring data accuracy and organization, as well as keeping performance data of the order to cash process itself. Your business strategy and optimal O2C process relies on your ability to collect and analyze the learnings from proper reporting and data management.

Order to Cash Automation Solutions

Many SaaS integration strategies involve heavy use of "point-to-point" integration, connecting each tool to another tool. For example, an eBay seller might use an eBay-QuickBooks connector to sync orders in eBay with sales receipts in QuickBooks.

For a fully automated, seamless order to cash process, companies rely on integration platforms as their automation solution. An iPaaS, integration platform as a service, gives users the ability to integrate many apps with each other in one synchronized system.

See Webinar: How a Retailer Integrated 14 Ecommerce Apps to Improve Operational Efficiency and Customer Experience

Order to Cash Transformation

When it's not organized and automated, the order to cash process can move slowly, create friction with your customers, and cause headaches for your employees. In a world where businesses are using new technologies to smooth out all pain points in their processes, improving your O2C process is of vital importance. Studies show that customer satisfaction is closely tied to order to cash.

Business experts use the term "order to cash transformation" to describe the ways a company improves its order to cash process in a way that provides great customer service. When you take care of all the details explained in this article, your operations become streamlined, allowing you to focus on a customer experience that is true to your company's brand and principles.