What is the order-to-cash process?

The order-to-cash process encompasses all steps from when a customer order is placed up until the business is paid (the cash). Those steps include order management and order fulfillment, through to credit management, then invoicing and ultimately payment collection.

What is procure to pay in simple words?

Procure to pay is the process of requisitioning, purchasing, receiving, paying for and accounting for goods and services. Procure to pay is often abbreviated as P2P, but it shouldn’t be confused with, for example, peer-to-peer networking technology, which is also called P2P.

How do I audit an order to cash?

This internal audit guide has been divided into the following key sub-processes within the Order to Cash business cycle:

1. Sales Forecasting.
2. Customer Identification.
3. Customer Credit Evaluation.
4. Price Master Maintenance.
5. Sales Order Processing.
6. Product Dispatch.
7. Invoicing.
8. Collections and Accounts Receivables.

Is procure-to-pay the same as accounts payable?

The accounts payable process is only one part of what is known as P2P (procure-to-pay). P2P covers the cycle from procurement and invoice processing to vendor payments. AP automation streamlines these steps and ensures a higher level of accuracy throughout every step of the workflow.

Is order to cash accounts receivable?

The O2C cycle starts when a customer makes a purchase and runs through the company’s entire order processing system. The order is shipped to the customer or the service is performed. An invoice is created and sent to the customer by accounts receivable. The customer sends payment that is collected by the company.

What is P2P and R2R?

The Finance & Accounting (F&A) function comprises three end-to-end processes – Procure-to-Pay (P2P), Order-to-Cash (O2C), and Record-to-Report (R2R). General accounting and reconciliations are the most frequently outsourced R2R activities given their transaction-intensive nature.

What is OTC accountant?

Order to Cash also known as O2C or OTC is the business process that covers the entirety of the order processing system right from receiving the order to up until the point the payment is made and an entry is logged in your accounting books.

What is the difference between dispute and deduction?

Deduction management is how your team keeps track of expected short pays, such as marketing deductions, sales rebates, early pay discounts, and other markdowns which would lower the amount owed by customers. Dispute management places a burden on your A/R team to solve the unknown problem of unexpected short pays.