---
title: "What Is Order to Cash?"
url: https://www.uncap.com/glossary/order-to-cash
author: "Denis Dyli"
published: 2026-10-11
updated: 2026-10-11
summary: "Order to cash (O2C) is the business process that runs from the moment a customer places an order until the customer pays for it, converting the order into cash. In ERP systems it typically covers order entry, fulfillment, invoicing, payment collection and cash application. It is an essential function in finance, and ERP systems provide order to cash processes."
---

# What Is Order to Cash?

> Order to cash (O2C) is the business process that runs from the moment a customer places an order until the customer pays for it, converting the order into cash. In ERP systems it typically covers order entry, fulfillment, invoicing, payment collection and cash application. It is an essential function in finance, and ERP systems provide order to cash processes.

**Order to cash**: Order to cash (O2C) is the business process that runs from the moment a customer places an order until the customer pays for it, converting the order into cash. In ERP systems it typically covers order entry, fulfillment, invoicing, payment collection and cash application. It is an essential function in finance, and ERP systems provide order to cash processes.

## How it works

Orders arrive through sales channels such as phone, email, the internet or a salesperson. Typical sub-processes in ERP systems include:

**Order to cash sub-processes in an ERP**

### 1. Account, Customer master data

The customer's master data is entered.

### 2. Order, Order entry

The order is created, availability is checked and the order is booked.

### 3. Fulfill, Fulfillment

Orders are fulfilled physically, through shipping and logistics, or digitally.

### 4. Invoice, Invoicing

On completion of key events, an invoice is generated and booked as sales.

### 5. Collect, Payments and collections

If payment hasn't arrived, the debt is recorded and pursued through dunning cycles until the funds come in.

### 6. Apply, Cash application and deductions

Cash application follows, and a deduction is handled if the customer short pays the invoice.

Order to cash starts at the order. Quote to cash starts earlier: it covers everything in order to cash plus purchase intent, configuration, pricing, quoting and contract lifecycle management.

## Example

A wholesale buyer orders 200 cases at $25 each on net 30 terms.

- Order. 200 x $25 = $5,000, booked against the buyer's account.
- Fulfill. The warehouse ships all 200 cases.
- Invoice. A $5,000 invoice goes out with a 30 day due date.
- Collect. The buyer pays $4,975, holding back $25 for one damaged case.
- Apply. The $4,975 payment goes through cash application, and the $25 short payment is handled as a deduction.

## On Shopify

Shopify B2B, which is available on all plans, includes features for several of these steps.

- Orders outside the store. When a company orders outside the store, such as by email or phone, you can create a draft order. With a company location assigned, prices, payment terms and checkout options follow that company's settings.
- Payment terms. Net 7, 15, 30, 45, 60 and 90, or due on fulfillment. All terms start from the day the order is placed.
- Invoices and payment. After setting terms on a draft order, you can send an invoice or accept payment. Buyers can also pay from their customer account with Pay now.
- Back office. Shopify lets you integrate ERP, accounting and other business systems with a B2B store, and ERP systems provide invoicing and collections.

## How Uncap helps

Once the order exists in Shopify, the cash half runs on your payment terms and your ERP, and a B2B-aware integration carries the order there. Our guide to [quote to cash on Shopify](/post/quote-to-cash-b2b-shopify) walks through each step and where the gaps show up.

## Related terms

- Quote to cash
- Payment terms
- Net 30
- Purchase order
- ERP integration
- Trade credit

## Sources

- Order to cash (Wikipedia)
- Setting up payment terms in B2B (Shopify Help Center)
- Creating B2B orders using draft orders (Shopify Help Center)

## Frequently asked questions

### What is the definition of order-to-cash?

It is the cycle of events from the moment a customer places an order until the customer pays for it.

### Is order-to-cash the same as accounts receivable?

No. Order to cash includes customer payments, collections and cash application, but it also covers customer master data, order entry and fulfillment, which come before the invoice.

### What are the steps involved in the billing process in O2C?

After the order is fulfilled and key events are complete, an invoice is generated and booked as sales. If payment hasn't arrived, the debt is recorded and pursued through dunning until the funds come in. Cash application follows, with a deduction if the invoice is short paid.