← Back to glossary Category: Operațional · Acronym: O2C Order-to-Cash (O2C) Quick answer: The end-to-end cycle from order receipt to invoice payment. A key cash-flow health indicator. Key takeawaysOrder entry (lost days: 0-3) — phone/email orders, manual re-keyingCredit check (0-2 days) — manual, no preconfigured limitsPick + Pack + Ship (1-3 days) — no WMS, no route optimizationInvoicing (1-5 days) — invoices issued weekly, not at shipmentCollection (15-45 days) — no automated follow-up, no dunning Definition Order-to-Cash (O2C) is the full chain: order received → credit check → stock allocation → shipment → invoicing → payment follow-up → cash received → bank reconciliation. Every extra day in the cycle = money locked in receivables. Why it is a strategic KPI In distribution and B2B services, a typical O2C cycle runs 35-65 days. At 50 days O2C on €5M monthly revenue, you keep €8.3M locked in receivables. Cutting 10 days releases €1.7M of cash. Stages and where time leaks Order entry (lost days: 0-3) — phone/email orders, manual re-keying Credit check (0-2 days) — manual, no preconfigured limits Pick + Pack + Ship (1-3 days) — no WMS, no route optimization Invoicing (1-5 days) — invoices issued weekly, not at shipment Collection (15-45 days) — no automated follow-up, no dunning Reconciliation (1-7 days) — manual bank statement ↔ invoice matching Automations that cut days EDI ORDERS → order in ERP within 5 min: -2 days Credit policy embedded in OMS: -1 day Auto DESADV + INVOIC at shipment: -3 days Automatic dunning (D+1, D+7, D+15): -8 days DSO AI reconciliation against MT940: -2 days Total potential: -16 O2C days, large cash unlock. Frequently askedDifference between O2C and DSO?DSO (Days Sales Outstanding) measures only the collection stage (invoice to cash). O2C covers the whole cycle, from order to cash. DSO is a sub-metric of O2C.Which O2C stage is the most expensive?Statistically, collection (45-60% of total duration). That is where most days are lost through missing dunning and unresolved disputes.How do I measure O2C across multiple channels?Centralized in the OMS, segmented per channel (classic B2B, marketplace, EDI retail, e-commerce). Each channel has a distinct typical O2C. Where Azuvio fitsSoftware OMSCalculator ROI O2CSoftware EDI Related termsDSO (Days Sales Outstanding) — Average number of days from invoice issue to cash collection. Key cash-flow indicator.EDI (Electronic Data Interchange) — Structured exchange of commercial documents between B2B partners, without emails or manual data entry.INVOIC — The EDIFACT commercial invoice message — exchanged directly between supplier and customer (different from the fiscal e-Invoice).ASN / DESADV (Advance Shipping Notice) — EDI shipping notice sent before goods physically arrive at the retailer — describes pallet, batch, quantity. Last updated: 2026-07-17