Hello
<b>Order to Cash cycle</b> is a comprehensive process which encompass broadly Order management, invoicing, collections/credit management, cash application and sometimes relating to posting and reporting.
To simplify Order to Cash cycle, we can break it into 2 stages:
1. order-to-invoice (also called revenue accounting in some industries) and
2. Invoice-to-cash. (The term “order-to-payment” is generally used to describe A/P processes.)
The Order-to-Cash Management describes the entire process chain for a standard sales order process with a customer. The business process encompasses all steps, from creating an order to recording payment by the customer.
When an order is entered, an availability check is performed for the material and the shipping point is determined automatically. Depending on the customer and material, some special events are set up for the order entry. For specific customers, upon entry of a material, the system may also propose a material for substitution. Also, if a certain order quantity is reached, the system may also generate a new item with free goods. This document also demonstrates material exclusion, which is when a material cannot be sold to a customer for some reason.
A delivery is created, combined into shipments (for transportation planning), then picked, and a goods issue is posted. In the subsequent billing process, an invoice is created and, if necessary, released to financial accounting. Incoming payments are documented in payment processing and then posted in financials.
<b>Sub modules in Order to Cash can be:</b>
1. CRM
2. Order processing
3. Foreign Trade management[export]
4. Billing and collection Management
5. Customer Agreement Monitoring.
Refer to the link <a href="http://www50.sap.com/businessmaps/FBB57FF1DEE9419FB5D4F2F82468EEAD.htm">Order-to-cash</a> for complete reference.
Regards,
Gauravjit.
Reward points if the explaination is helpful.
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