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Importance of Order-to-Cash Cycle in Logistics & Supply Chain

June 27, 2019 Rick LaGore

order-to-cash is important to logistics & supply chain

The order-to-cash cycle is the set of business processes associated with receiving a customer order through to the customer’s payment.

order-to-cash is important to logistics & supply chain

As described in our recent article entitled Definition of Logistics in 100 Words, logistics is the subset of processes that fall under supply chain management that plans, executes, reports and coordinates the movement of goods within an organization’s network of stakeholders that include:

  • Suppliers
  • Production & Manufacturing
  • Packaging
  • Distribution
  • Customers

With the above in mind, logistics and supply chain management is “the” business segment companies need to focus on to optimize their O2C cycle.

The importance of an efficient O2C is because the quicker a company can transform their raw good into a salable product to be received and billed to the customer the less cash will be tied up in the various stages of inventory, which will then provide more resources needed to further invest in its growth and prevail over its competition.

Below is a tremendous infographic from SalesForce thoroughly outlining the O2C processes and its impact to cash.

Click To Enlarge

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Via Salesforce

More articles of intersted associated with order-to-cash include:

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To learn more about Intek Freight & Logistics and the logistics industry, we invite you to visit our website and subscribe to our weekly blogs.

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