Order-to-Cash Workflow

Overview

The Order-to-Cash (O2C) workflow represents the complete end-to-end process from receiving a customer order through collecting payment. This guide demonstrates how the Sales module components work together to create a seamless revenue cycle.

Complete Order-to-Cash Flow

Process Overview

Order Creation → Order Confirmation → Order Fulfillment →
Order Shipping → Invoice Generation → Invoice Sending →
Payment Processing → Payment Collection → Order Completion

Timeline Example

Stage	Timeline	Status
Order Created	Day 0, 10:00 AM	Draft
Order Confirmed	Day 0, 11:00 AM	Confirmed
Fulfillment Begins	Day 1, 9:00 AM	Processing
Order Shipped	Day 2, 2:00 PM	Shipped
Invoice Generated	Day 2, 3:00 PM	Draft
Invoice Sent	Day 2, 3:30 PM	Sent
Payment Received	Day 10, 9:00 AM	Completed
Order Completed	Day 10, 9:15 AM	Completed

Total Cycle Time: 10 days from order to cash

Step-by-Step Workflow

Step 1: Create Order

API Call: POST /api/v1/sales/orders

Request:

json

{
  "customer_id": 42,
  "order_date": "2025-12-17",
  "due_date": "2025-12-24",
  "source": "online_store",
  "currency": "USD",
  "billing_address": {
    "street": "123 Main St",
    "city": "San Francisco",
    "state": "CA",
    "postal_code": "94105",
    "country": "US"
  },
  "shipping_info": {
    "method": "standard",
    "street": "123 Main St",
    "city": "San Francisco",
    "state": "CA",
    "postal_code": "94105",
    "country": "US"
  },
  "items": [
    {
      "product_id": 101,
      "quantity": 2,
      "unit_price": 99.99
    },
    {
      "product_id": 102,
      "quantity": 1,
      "unit_price": 149.99
    }
  ]
}

Result: Order created with status draft, order number ORD-A3X7K9M2

Step 2: Confirm Order

API Call: POST /api/v1/sales/orders/{order}/confirm

Request:

json

{
  "payment_authorization": "AUTH-123456",
  "notes": "Payment verified - ready for fulfillment"
}

What Happens:

Order status → confirmed
Inventory reserved for order items
Fulfillment team notified
Payment authorization captured (if using auth-capture flow)

Result: Order confirmed, ready for fulfillment

Step 3: Process Order

Manual/Automatic: System transitions order to processing status

Activities:

Warehouse receives pick list
Items picked from inventory
Quality control checks performed
Items packed for shipment
Shipping label generated

Tracking: Monitor via GET /api/v1/sales/orders/{order}/activities

Step 4: Ship Order

API Call: POST /api/v1/sales/orders/{order}/ship

Request:

json

{
  "tracking_number": "1Z999AA10123456784",
  "carrier": "UPS",
  "service_level": "Ground",
  "shipped_date": "2025-12-19",
  "estimated_delivery": "2025-12-23"
}

What Happens:

Order status → shipped
Inventory fully decremented
Customer receives shipping notification
Tracking information recorded

Result: Order in transit to customer

Step 5: Generate Invoice

API Call: POST /api/v1/sales/orders/{order}/generate-invoice

Request:

json

{
  "issue_date": "2025-12-19",
  "due_date": "2026-01-18",
  "payment_terms": {
    "terms": "Net 30",
    "due_days": 30
  },
  "auto_send": false
}

What Happens:

Invoice created from order line items
Invoice number assigned: INV-20251219-001
Tax and totals calculated
Invoice status: draft

Result: Invoice ready for review and sending

Step 6: Send Invoice

API Call: POST /api/v1/sales/invoices/{invoice}/send

Request:

json

{
  "email_to": ["billing@acme.com"],
  "subject": "Invoice INV-20251219-001",
  "message": "Please find attached invoice for your recent order. Payment due within 30 days.",
  "attach_pdf": true
}

What Happens:

Invoice status → sent
PDF invoice generated
Email sent to customer
Invoice appears in accounts receivable
Payment due date tracking begins

Result: Customer has invoice, payment expected by due date

Step 7: Process Payment

API Call: POST /api/v1/sales/payments

Request (Customer initiates payment):

json

{
  "customer_id": 42,
  "invoice_id": 456,
  "amount": 347.47,
  "method": "bank_transfer",
  "reference_number": "WIRE-123456"
}

Follow-up: POST /api/v1/sales/payments/{payment}/process

What Happens:

Payment created with status pending
Payment processed through gateway
Payment status → completed
Transaction recorded

Result: Payment received and confirmed

Step 8: Apply Payment to Invoice

API Call: POST /api/v1/sales/invoices/{invoice}/apply-payment

Request:

json

{
  "payment_id": 789,
  "amount": 347.47,
  "payment_date": "2025-12-27"
}

What Happens:

Invoice amount_paid updated
Invoice amount_due → $0.00
Invoice status → paid
Accounts receivable updated

Result: Invoice paid in full

Step 9: Complete Order

API Call: POST /api/v1/sales/orders/{order}/complete

Request:

json

{
  "delivery_confirmed": true,
  "delivered_date": "2025-12-23"
}

What Happens:

Order status → completed
Revenue recognized
Sales metrics updated
Order archived

Result: Order-to-Cash cycle complete!

Workflow Variations

Variation 1: Prepaid Orders

Flow: Payment → Order → Fulfillment → Shipping → Invoice (receipt)

Process payment first: POST /api/v1/sales/payments
Create order with payment reference
Confirm order (payment already received)
Fulfill and ship
Generate invoice as receipt (optional)

Use Case: E-commerce, retail, prepaid services

Variation 2: Net Terms (Credit Customers)

Flow: Order → Fulfillment → Shipping → Invoice → Payment (30-60 days later)

Create and confirm order
Fulfill and ship (no payment yet)
Generate and send invoice with Net 30/60 terms
Monitor invoice aging
Send payment reminders
Process payment when received

Use Case: B2B sales, established customers, wholesale

Variation 3: Partial Payments

Flow: Order → Deposit → Fulfillment → Shipping → Final Payment → Invoice

Create order
Process deposit payment (e.g., 50%)
Apply partial payment to order
Fulfill and ship
Process final payment
Generate final invoice showing both payments

Use Case: Custom orders, large purchases, installment sales

Variation 4: Consolidated Billing

Flow: Multiple Orders → Month End → Single Invoice → Payment

Create and fulfill multiple orders throughout month
At month end, generate consolidated invoice
Invoice references all orders
Single payment for all orders
Payment distributed across invoices

Use Case: Enterprise accounts, subscription services, corporate customers

Integration Points

Order → Inventory Integration

When: Order confirmation Action: Reserve inventory for order items

GET /api/v1/operations/inventory?product_id=101
POST /api/v1/operations/inventory/reserve
{
  "product_id": 101,
  "quantity": 2,
  "reference_type": "Order",
  "reference_id": 123
}

Order → Invoice Integration

When: After shipping (or per business rules) Action: Automatically generate invoice from order

POST /api/v1/sales/orders/123/generate-invoice
{
  "auto_send": true,
  "due_date": "2026-01-18"
}

Invoice → Payment Integration

When: Payment received Action: Apply payment to invoice, update balance

POST /api/v1/sales/invoices/456/apply-payment
{
  "payment_id": 789,
  "amount": 347.47
}

Payment → Accounting Integration

When: Payment completed Action: Create accounting entries

Debit: Bank Account
Credit: Accounts Receivable

Monitoring the O2C Cycle

Dashboard Metrics

Endpoint: GET /api/v1/sales/dashboard

Key Metrics:

Average O2C cycle time
Orders pending fulfillment
Orders pending payment
Overdue invoices
Cash collection rate
Days Sales Outstanding (DSO)

Orders Requiring Attention

Endpoint: GET /api/v1/sales/orders/requires-attention

Shows:

Orders overdue for fulfillment
Orders pending confirmation
Orders on hold

Overdue Invoices

Endpoint: GET /api/v1/sales/invoices/overdue

Shows:

Invoices past due date
Days overdue
Outstanding amounts
Customer payment history

Performance Metrics

Endpoint: GET /api/v1/sales/orders/performance-metrics

Provides:

Order fulfillment time
Invoice generation time
Payment collection time
Complete O2C cycle time

Best Practices

Order Stage

Validate Customer Data: Ensure complete and accurate customer information
Check Inventory: Verify stock availability before confirming orders
Set Realistic Due Dates: Consider fulfillment time and shipping duration
Confirm Payment: Authorize payment before allocating inventory

Fulfillment Stage

Prioritize Orders: Use priority flags to sequence fulfillment
Batch Similar Orders: Group orders for efficient picking
Quality Check: Inspect items before packing
Update Status Promptly: Keep order status current

Invoicing Stage

Invoice Promptly: Generate invoices same day as shipment
Include Details: Provide clear line items and payment instructions
Set Appropriate Terms: Match terms to customer creditworthiness
Send Immediately: Don't delay sending invoices

Payment Stage

Offer Multiple Methods: Accept various payment types
Send Reminders: Automate payment reminder schedule
Track Aging: Monitor accounts receivable aging weekly
Follow Up Personally: Call customers with overdue payments

Completion Stage

Verify Delivery: Confirm customer received goods
Reconcile Payments: Match payments to invoices daily
Complete Orders: Mark orders complete promptly for accurate metrics
Archive Records: Maintain complete audit trail

Troubleshooting Common Issues

Order Stuck in Processing

Symptoms: Order in processing status for extended period

Causes:

Inventory shortage
Fulfillment bottleneck
Quality control hold

Resolution:

Check inventory availability
Review fulfillment queue
Contact warehouse manager
Update customer on delay

Invoice Not Paid

Symptoms: Invoice past due date

Causes:

Customer never received invoice
Customer dispute
Customer cash flow issues
Invoice sent to wrong contact

Resolution:

Resend invoice
Call customer
Verify contact information
Offer payment plan if needed

Payment Processing Failed

Symptoms: Payment declined or failed

Causes:

Insufficient funds
Invalid payment method
Card expired
Fraud detection

Resolution:

Contact customer for updated payment details
Offer alternative payment methods
Retry with updated information
Consider payment plan

Order-to-Cash Taking Too Long

Symptoms: High DSO, long cycle times

Causes:

Slow fulfillment
Delayed invoicing
Poor collection processes
Customer payment terms too long

Resolution:

Optimize fulfillment operations
Automate invoice generation
Implement aggressive collections
Review and tighten payment terms

Success Metrics

Key Performance Indicators

Order Fulfillment Time:

Target: < 3 days
Measure: Order confirmed → Order shipped

Invoice Generation Time:

Target: Same day as shipment
Measure: Order shipped → Invoice sent

Days Sales Outstanding (DSO):

Target: < 45 days
Measure: Invoice sent → Payment received

Order-to-Cash Cycle Time:

Target: < 30 days
Measure: Order created → Payment received

Collection Rate:

Target: > 95%
Measure: Payments collected / Invoices sent

On-Time Delivery Rate:

Target: > 90%
Measure: Orders delivered by due date / Total orders

Automation Opportunities

Automated Workflows

Auto-Confirm Orders: Automatically confirm orders with valid payment
Auto-Generate Invoices: Create invoices immediately after shipment
Auto-Send Invoices: Email invoices without manual review
Auto-Apply Payments: Match and apply payments to invoices
Auto-Send Reminders: Schedule payment reminder emails
Auto-Complete Orders: Mark orders complete after payment and delivery

Webhook Integrations

Order Events:

order.created
order.confirmed
order.shipped
order.completed

Invoice Events:

invoice.created
invoice.sent
invoice.paid
invoice.overdue

Payment Events:

payment.completed
payment.failed
payment.refunded
payment.disputed

Order Management - Creating and managing orders
Order Workflow - Order fulfillment processes
Invoice Generation - Creating invoices
Invoice Workflow - Invoice management
Payment Processing - Processing payments
Sales Analytics - O2C performance metrics

Order-to-Cash Workflow ​

Overview ​

Complete Order-to-Cash Flow ​

Process Overview ​

Timeline Example ​

Step-by-Step Workflow ​

Step 1: Create Order ​

Step 2: Confirm Order ​

Step 3: Process Order ​

Step 4: Ship Order ​

Step 5: Generate Invoice ​

Step 6: Send Invoice ​

Step 7: Process Payment ​

Step 8: Apply Payment to Invoice ​

Step 9: Complete Order ​

Workflow Variations ​

Variation 1: Prepaid Orders ​

Variation 2: Net Terms (Credit Customers) ​

Variation 3: Partial Payments ​

Variation 4: Consolidated Billing ​

Integration Points ​

Order → Inventory Integration ​

Order → Invoice Integration ​

Invoice → Payment Integration ​

Payment → Accounting Integration ​

Monitoring the O2C Cycle ​

Dashboard Metrics ​

Orders Requiring Attention ​

Overdue Invoices ​

Performance Metrics ​

Best Practices ​

Order Stage ​

Fulfillment Stage ​

Invoicing Stage ​

Payment Stage ​

Completion Stage ​

Troubleshooting Common Issues ​

Order Stuck in Processing ​

Invoice Not Paid ​

Payment Processing Failed ​

Order-to-Cash Taking Too Long ​

Success Metrics ​

Key Performance Indicators ​

Automation Opportunities ​

Automated Workflows ​

Webhook Integrations ​

Related Guides ​

Order-to-Cash Workflow

Overview

Complete Order-to-Cash Flow

Process Overview

Timeline Example

Step-by-Step Workflow

Step 1: Create Order

Step 2: Confirm Order

Step 3: Process Order

Step 4: Ship Order

Step 5: Generate Invoice

Step 6: Send Invoice

Step 7: Process Payment

Step 8: Apply Payment to Invoice

Step 9: Complete Order

Workflow Variations

Variation 1: Prepaid Orders

Variation 2: Net Terms (Credit Customers)

Variation 3: Partial Payments

Variation 4: Consolidated Billing

Integration Points

Order → Inventory Integration

Order → Invoice Integration

Invoice → Payment Integration

Payment → Accounting Integration

Monitoring the O2C Cycle

Dashboard Metrics

Orders Requiring Attention

Overdue Invoices

Performance Metrics

Best Practices

Order Stage

Fulfillment Stage

Invoicing Stage

Payment Stage

Completion Stage

Troubleshooting Common Issues

Order Stuck in Processing

Invoice Not Paid

Payment Processing Failed

Order-to-Cash Taking Too Long

Success Metrics

Key Performance Indicators

Automation Opportunities

Automated Workflows

Webhook Integrations

Related Guides