Describing the Order to Cash Stage

In this lesson, we cover the Order to Cash stage part of the Lead to Cash process.

During the Order to Cash stage of the Lead to Cash process, several important actions take place while executing a customer's order, delivering the product or service, and receiving payment. It includes various key components:

1. Order Management: This involves handling and processing customer orders, including order entry, verification, and tracking.
2. Fulfillment and Delivery: Packaging, dispatching, and delivering the ordered items to the customer, or providing the stipulated services.
3. Invoicing: Producing invoices for the delivered goods or services, including any applicable taxes and discounts, and sending them to the customer.
4. Payment Processing: Receiving and processing payments from customers using various payment methods such as credit cards, checks, electronic funds transfer, and so on.

Let’s look at the following image.

The Order to Cash process can be split into two main substages: Order to Fulfill and Invoice to Cash.

Order to Fulfill:

The Order to Fulfill substage involves all the activities from the moment a customer places an order for products, services, and subscriptions until the product is delivered, the service is planned, provisioning is completed, or the subscription lifecycle begins. It ends with a technician installing the products, and the customer starting to use the service.

Invoice to Cash:

The Invoice to Cash substage begins after the invoice is generated and sent to the customer. It encompasses activities related to payment processing, accounts receivable management, and cash application. This stage involves receiving and processing payments from customers, tracking outstanding payments, managing overdue invoices, and reconciling customer accounts.

Let’s look at each substage separately.

In the Order to Fulfill substage, the order gets split into physical, subscription, and service orders, based on product type, and the orders are fulfilled by the respective backend systems.

The following are the main tasks carried out in this substage:

• Splitting the order into subscription, sales, and service orders, based on product type.
• Processing of the orders by the respective back-end systems–subscription order, sales order, and service order.
• Creation and assignment of service calls in SAP Field Service Management or SAP Service Cloud, and completion of the service order.

This image summarizes the Order to Fulfill substage.

The following are the main tasks carried out in this substage:

• Triggering the billing or invoicing tasks by the back ends, and generating the invoice
• Collecting the customer payment for the invoice, and booking and posting the revenue to finance

The following graphic summarizes the Invoice to Cash substage.

Let’s look at the Order to Cash stage by watching the following video.