Guide to order-to-cash

By Qvalia  |  Updated September 2026

Order-to-cash (O2C) is the end-to-end process a business follows from the moment a customer places an order to the moment payment is received, covering order management, credit checks, fulfillment, shipping, invoicing, accounts receivable, payment collection, and reporting.

Your sales team has worked hard to find new clients and convince them that your solutions are ideal for their circumstances. When it comes time to order, the last thing you want is for a frustrating transaction experience to muddle an otherwise sure-fire sale.

When it comes to high-volume business-to-business (B2B) transactions, there’s a lot at stake. Having a formal and well-planned out process for B2B payments is paramount to improving your customer experience and encouraging long-time partners to continue working with you.

Improving your sales in B2B commerce is all about simplifying the customer experience, as there are many roadblocks and speed bumps along the way that you have a chance to smooth out. Customers not only have to choose the right products and services that will give them value for their money but also have to work through purchase orders, invoices, and other documentation during the ordering process. Other steps like the use of credit cards add to the cost of the process and come with extra bureaucratic burden to work through, for you and your customers.

For this reason, the finance sector has a name for all the order processing a business handles: the order-to-cash (O2C) process.

In this guide, we’ll explore what the O2C process is, why it matters, and its key components.

Order-to-cash er en delmængde af din overordnede salgsproces. Når en kunde afgiver en ordre, udfører du disse handlinger for at kunne levere varerne eller tjenesterne og modtage betalingen.

A common mistake online retailers make is treating business clients as if they were consumers. Companies make up a large part of the consumer base and have unique needs that should be addressed in O2C. B2B and B2C transactions differ in several ways:

We typically consider sales and marketing to be the steps preceding O2C as you attempt to push for conversions from potential buyers, but these efforts are not entirely absent from the O2C process either.

Similarly, even after the order is fulfilled, businesses still continue to record the activity and find new ways to optimize the procedure. These steps are also considered part of order-to-cash.

We will go into detail regarding every step of order-to-cash later on. For now, think of O2C as an umbrella term for order management, credit checks, invoicing, shipping, payment, accounting, debt collection, and other actions related to the fulfillment process.

Business-to-business refers to the business relationship between companies, for example when a company provides products, services, or both to another company in exchange for money. The customer involved is always another legal entity, organization, company, governmental organization, or NGO.

This is the case for business-to-business (B2B) payments; for example:

B2B typically involves larger cash amounts and may be, but not always, more logistically complex compared to B2C (business-to-customer). The result is a generally longer, slower process as more verifications and decisions must be made throughout.

Thanks to the rise of the “as a Service” economy, B2B transactions are likely to increase greatly in the coming years.

It should be clear as to why order-to-cash deserves attention. It directly contributes to your bottom line, whether you are selling to customers or obtaining invoices for a major purchase from another business.

By taking action regarding your order-to-cash process, you also put yourself in a position to adopt new technologies and trends that will put you ahead of the competition. For instance, roughly a quarter of B2B payments are still made by paper check rather than electronically, which leaves plenty of room for process optimization.

The exact payment methods used in these transactions depend on what the suppliers prefer, but the following are some general types. B2B is not as straightforward as B2C, as most of us rely entirely on credit cards or cash whenever we go to a store.

Invoices are the most common transactional document used by sellers. Invoices define the specifics of a transaction, including date of sale, the invoice number, both the supplier and customers full name, address, VAT identifiers, the quantity, description, price, and payment terms for the goods and services, and more.

Invoices can be paid through a variety of methods. Here are a few of the most common options:

Kontanter er ret ualmindeligt i dag, uanset om vi taler om B2B eller B2C. Det er ikke altid praktisk at have alle kontanter på hånden på én gang, og du skal være fysisk placeret i nærheden af din leverandør, for at transaktionen kan gennemføres. Kontanter har også nogle problemer med sikkerheden, hvis du sender dem med posten. Du skal ikke forvente, at det er en faktor på dagens marked.

Just like cash, paper checks have the usual inconvenience and risk of cash. Similarly, processing checks is error-prone and time-consuming. Checks now account for just 26% of B2B payments, down from 81% two decades ago, and the method is rapidly losing traction in favor of digital options.

Wire transfers have one of the fastest processing times of any B2B payment method, as the funds can generally be used by the receiving party within 24 hours. Wire transfers can be costly to complete, but are ideal for international payments.

ACH er en metode, hvor penge overføres direkte fra en bankkonto til en anden. På grund af det store papirarbejde, der er involveret, er det ikke sandsynligt, at du vil se det brugt til engangskøb, men det er en god idé ved gentagne betalinger. Det vil sige, at det er relativt hurtigt og kommer med lave gebyrer. Husk dog på, at det kun er tilgængeligt i USA og kan være svært at tilbageføre, hvis du nogensinde begår en fejl. Der er også bekymringen om privatlivets fred, da du skal dele dine bankkontooplysninger for at det kan ske.

Credit cards and ACH are already some examples of electronic payments, but another that’s gaining attention in the B2B space is the virtual card. It’s generally free of fees, fast to use, and secure. Expect to see it in the near future for business transactions. As with any credit card, one of the main downsides is the processing fees.

Nogle tjenesteudbydere fungerer som mellemmand mellem afsenderen og modtageren af pengene. Gateway-leverandøren indsamler pengene og deponerer dem sikkert på destinationen. Et velkendt eksempel, som du måske kender, er Stripe. Betalingsgateways kan bruges til enten engangstransaktioner eller tilbagevendende transaktioner, men vær opmærksom på, at du er afhængig af gateway-leverandørens ekspertise, når du bruger en.

Payment solutions optimized for business customers, with capabilities to send invoices in various formats upon checkout. Authentication of customers can be managed via integrated workflow apps or mandatory accounts with secure log-ins.

Processen på order-to-cash kan opdeles i følgende generelle trin: ordrehåndtering, kreditstyring, opfyldelse, forsendelse, fakturering, debitorer, inddrivelse af betalinger og rapportering.

Startlinjen for order-to-cash -processen er, når kunden afgiver en ordre, som kan tage form af..:

Regardless, the order management phase begins here. Use automation to notify everyone involved about the order and the next steps for it. Only then can you ensure fast fulfillment and order accuracy. The result will ultimately be a satisfied customer and more revenue for you.

Hvis dette køb er det første for en bestemt kunde, kan det være på sin plads at foretage en kreditvurdering. Automatisering kan hjælpe med at tage sig af det meste af arbejdet, mens finansmedarbejderne kan tage sig af de sager, der kræver et mere omfattende tilsyn.

Kreditstyring er i høj grad en opgave for debitorafdelingen, da den giver kvalificerede kunder mulighed for at gå videre til opfyldelse, samtidig med at den sikrer, at din virksomhed kun tilbyder kredit, når det er nødvendigt.

Her giver automatiseringsløsninger god mening for at føre registreringer i realtid, når de er nødvendige. De kan også hjælpe dig med at digitalisere dine ordrer, så de relevante detaljer altid er læsbare. Håndtering af dem via den traditionelle papirvej kan føre til fejl og ineffektivitet.

Hvis du ikke kan opfylde en ordre, skal du underrette kunden og annullere den for at undgå yderligere frustrationer ved fakturering.

Fra leverandørens side giver det god mening at have en ordentlig lagerstyringspraksis på plads, så du ikke er løbet tør for lagerbeholdning, når en ny ordre kommer ind.

Forsendelsesfasen på order-to-cash er meget afhængig af præcis logistik for at sikre pålidelighed og hastighed. Leveringstidspunkter og afhentningsplaner er vigtige for at sikre, at ordrerne når frem til kunderne til tiden.

Forsinkelser i faktureringen er berygtet for at ødelægge kundeoplevelsen. Forsinkelser og unøjagtigheder er ubelejligt for alle, så en revision af din faktureringsproces hjælper dig med at planlægge dit cashflow og minimere frustrationer hos kunderne.

The rapidly accelerating shift from analog invoice formats to e-invoicing moves the paperwork into the digital workspace. By utilizing completely digital formats, and emerging exchange networks for business documents such as Peppol, the digital management provides greater efficiency and gives you more control over the content and accuracy of your invoices. The advantages of e-invoicing are numerous:

Debitorafdelingen er ansvarlig for at overvåge alle udestående fakturaer og reagere på eventuelle fejl, der kan forsinke betalingen. Disse medarbejdere skal normalt dykke dybt ned i dataene i order-to-cash -systemet, så de kan udstede en revideret faktura så hurtigt som muligt.

Det er derfor, at automatiseret fakturering er kommet frem i lyset. Fakturaer kræver en notorisk mængde manuelt arbejde og datapunkter, herunder ordredato, forsendelsestider, produktspecifikationer m.m. Hvis du reducerer denne belastning af dit personale, resulterer det i betydelige forbedringer af ydeevnen.

Hvis din debitorafdeling er effektiv nok, vil den behandle betalinger fra kunderne hurtigt nok til, at din O2C-proces kan acceptere dem. Ellers risikerer du at skabe gnidninger med dine kunder og ødelægge dine likviditetsoverslag i det lange løb.

On the other side, you also have to plan for customers being late on their own payments. In this case, the system must automatically notify those clients if they attempt to make further purchases. Your finance teams must similarly review overdue payments and make decisions based on debt forecasts.

Because invoices often have long payment terms that cause issues with cash flow, companies that sell in B2B markets consult with factoring companies. Factoring is the practice of buying up unpaid invoices at a discounted price so that the owner of the invoices gets the cash faster.

Once a factoring provider receives the invoice, that firm takes over the payment process for the invoice. Factoring makes sense when you’re okay with a lower amount as long as you receive it in a shorter time frame. In other words, you are accelerating cash flow by accepting the money before your client has finished paying off the invoice.

Det er vigtigt at vide, hvad der foregår i din order-to-cash proces, fordi det giver dig mulighed for at forstå, hvordan disse finansielle aktiviteter påvirker resten af din virksomhed:

Derfor har mange softwareprogrammer indbyggede rapporterings- og analysefunktioner. Order-to-cash er en stærkt sammenkoblet proces; et forsinket trin kan skabe problemer for alt andet. Ledelsen bruger ofte rapporteringsværktøjer til at grave de små problemer frem og løse dem, så O2C generelt bliver bedre.

Businesses must frequently monitor all aspects of the order-to-cash process to make sure everything’s running properly and efficiently. There are several common metrics that experienced management teams look for in this regard.

Also known as DSO, the day’s sales outstanding metric shows us how long it takes for the business to receive the payment after a sale is made. Cash flow can be challenging to keep track of, and managers running the company on credit must know this figure to keep debt in check and track earnings accurately.

How much is the order-to-cash process contributing to the total revenue of the business? The higher this figure is, the more you are earning from selling products as opposed to other sources of income. Most management teams would obviously prefer to maximize this value, and it typically takes the form of a percentage of total revenue.

Full-time equivalent (FTE) is a measure of an employee’s workload. It matters for O2C because you want to know the individual productivity of each staff member related to sales.

If the workload is too high for the number of employees on site, then you have an indicator to assign more staff to that task. Likewise, you might want to drop some people if there are too many.

Måling af FTE er en måde at optimere dine omkostninger på nu og hjælpe dig med at planlægge for fremtiden, når du skal beslutte, hvor mange medarbejdere du har brug for til et senere projekt.

We’ve mentioned before that reporting and analytics matters in the order-to-cash process, whether we’re looking at the supply chain, the inventory management, the manufacturing, or the logistics.

Regular reports give you an up-to-date picture of how smoothly everything is running and allow you to track key performance indicators directly related to O2C.

Tying into the last point, it’s clear that O2C relies heavily on paperwork, data entry, and analytics. These three tasks are all much faster and more reliable on automated software-based solutions as opposed to traditional manual methods. Adopting automation allows you to increase your throughput, minimize delays, and lower the risk of error. It also often results in better analytics and reporting capabilities. So don’t neglect keeping track of your automation rate and automation potential.

Order-to-cash is an essential process, but it’s not without its difficulties. B2B payments can be a hassle to file efficiently for several reasons.

We’re talking about paperwork. From checks to cash, the traditional methods of payment are just too slow for modern-day operations, yet they still make up 26% of all B2B transactions. Converting to digital is an inevitable change that will take some work to get going.

Meget af den fakturering, der foregår på order-to-cash , involverer masser af dataindtastning og fysisk papirarbejde. Virksomhederne kæmper for at balancere disse typer job med vigtigere arbejde, som medarbejderne ellers kunne udføre. En del af den finansielle automatiserings appel ligger i at frigøre tid i løbet af dagen til andre opgaver som strategisk planlægning.

En væsentlig konsekvens af de to ovennævnte problemer er en generelt langsommere O2C-proces. Hvis du ikke kan fremskynde denne arbejdsgang, risikerer du at blive forsinket eller ikke at kunne udnytte rabatterne for tidlig betaling.

Ved store B2B-transaktioner kan det nogle gange tage et par dage, før en ordre er afgivet, og før pengene dukker op på den anden konto. Hvordan sikrer du, at dit cashflow er indrettet på en sådan måde, at der er plads til denne tid?

A lot of payment methods require some type of added processing cost, which can add up especially when you have recurring payments. You will have to factor those in when doing your financial planning.

Protecting the sensitive data shared during a transaction matters, as you don’t want to lose the trust of your customers, merchants, or business partners.

Det er vigtigt at spore pengestrømmene for at bevare overblikket over dine transaktioner og kontrollere potentielle fejl, men mange virksomheder har ikke de rette systemer til at gøre det.

Invoicing software rarely include support for checkout solutions, and traditional payment gateways are, with few exceptions, not optimized for the needs of B2B transactions.

A recurring theme of this guide is the role of automation in solving many of the issues companies today are experiencing with regards to the order-to-cash process.

In addition to the reduced fees of using virtual cards, handling invoices through a B2B payment solution can result in several dollars saved each invoice. These amounts add up for companies managing a lot of orders.

Automation always results in better efficiency, but don’t expect it to take over your employees’ jobs entirely. These solutions aim to supplement the workflow so that human staff can focus on more interesting, and value creating, parts of the job.

Having full visibility into the activities of accounts payable and receivable gives you more options for tracking down payment statuses, managing cash flow, and finding new ways to optimize the entire process.

The threat of cybercrime is always on our mind, but thankfully many O2C solutions have responded with their own built-in security features to protect against fraud, non-compliance, and other potential threats.

Optimal O2C management lies in having access and control over every step of the process at all times. You’ll also need all the extra tools like digital invoicing, support for e-commerce solutions, payment reconciliation, and automated shipping notifications. Only recently have dedicated financial platforms arisen to allow this type of management in today’s workflows.

Order-to-cash includes all the activities, tools, and processes businesses undergo to fulfill an order from a customer. From initial purchase to delivery and the data analytics afterwards, there’s a lot that goes into this complex yet essential process.

Companies that master O2C often experience improved customer satisfaction due to fewer payment delays and setbacks. For instance, having a user-friendly B2B payment gateway in place like Qvalia’s Autobilling on your e-commerce website helps B2B customers place orders without any phone calls, expense reporting procedures, or credit cards. Fewer potential points of frustration mean better sales figures.

Automation has also helped a broad range of businesses achieve reliable O2C processes by eliminating menial tasks and facilitating comprehensive visibility, which in turn results in more ways to optimize B2B transactions.