SAP OTC-Order to cashSAP Order To Cash Cycle (SAP OTC) : FI-SD Integration and ConfigurationUpdated on August 23, 2014What is SAP Order to Cash (SAP OTC) ?Order to Cash is an integration point between Finance (FI) and Sales (SD). It is also known as OTC or O2C in short form. It is a business process that involves sales order from customers to delivery and invoice. It comprises SO, Delivery, Post Goods Issue (PGI) and billing to customers. OTC process is a very important process in Enterprise Resource Planning software(ERP Software). Both major ERP software SAP and Oracle include this process.It's configuration touches both Finance and Sales & Distribution modules.This is an end to end process from customer Inquiry to goods delivery, billing and payment of money. The process starts when a customer inquires for an inventory item (finished goods for a company). The customer gets quote for the item and place an order for the quantity needed. A user from company place the order and pass it for processing. Inventory gets picked up from warehouse and shipped to customer. Billing process also starts with delivery and it can be sent with the item or later. This is an overall OTC scenario in general.This process gives integration between customer master record, sales organization, sales offices, distribution channels, divisions and plants.Here in this article, we are going to discuss the steps in details.

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SAP OTC Process FlowSAP OTC is a process involved customer sales order creation and satisfying customer requirements via delivery.Prerequisites are customer master record is set up, sales area (sales organization, divisions and distribution channels) was set up already.Generally steps are as follows: Customer Inquiry Quotation for customer inquiry Sales Order creation Post Goods issue (PGI) Delivery Billing- Bill sent to customer Receipt of money- Customer PaymentThe First two steps that are inquiry and quotation may or may not happen. A new customer may inquire and ask for quotation but an old customer may not inquire. Moreover, if you have contracted agreement to sell products at a certain price than customer will directly order without quotation.Now, let's see what is the impact on the accounting entries for this cycle steps. Each step has it's own different configuration these steps used in business workflow.As I mentioned earlier, this process involves many different organizational levels. Most important organizational levels in this process is Company code, sales organizations, distribution channels, divisions and plants.Sales & Distribution CyclePin It See all 2 photosOTC Process StepsTransaction CodeAccounting Entries

InquiryVA11No

QuotationVA21No

Sales OrderVA01No

Post Goods Issue (PGI) VL01nYes

DeliveryVL01nYes

BillingVF01Yes

Receipt of MoneyFB50Yes

Business Process Associated With SAP Pin It See all 2 photosWhat is the most important integration in SAP ?Top of Form Order to Cash (OTC) (FI-SD Integration) Procure to Pay (PTP) (FI-MM Integration) FI-HR Integration FI-CO IntegrationBottom of FormSee results without votingOrder to Cash ConfigurationThis is an imported integration in SAP landscape. Here are the configuration steps in details. Its configuration happened in transaction code OBYC.Inquiry : A customer inquire about the product price and service. This is a very starting point of OTC process. This process does not have any effect on general ledger accounts and do not have any accounting entries. Once a customer creates inquiry, an inquiry number is generated. Inquiry is created by transaction code VA11.Quotation: Quotation is a price quote given to the customer. A quotation follows inquiry steps. A quotation can be created via inquiry or without inquiry reference number. A quotation is created by transaction code VA21.Sales: According to some SAP experts, Sales order is actually the first step of OTC process. After inquiry and quotation, once it's gets created. Sales order can be created with reference of quotation or without reference. It does not make any accounting book entry and it does not make any change in General Ledger accounts. It is just a commitment to deliver goods to the customer. SO can be created with transaction code VA01.Post Gods Issue: Post goods issue is the steps where goods are being picked by warehouse, packed and shipped to the customer's given shipping address as per the sales order. We have accounting entries as inventory is being credited against the cost of goods sales (COGS) debited. General ledger accounts associated with the cost of goods sales and inventory is affected respectively.Delivery: Delivery follows post goods issue (PGI).Delivery is the actual fulfillment of goods to the customer shipping address. At delivery stage, we have accounting entries in the books. At this stage, we debit revenue account and credit customer account. Transaction code for delivery is VL01n.Billing: At billing stage, we send the bill to customer for the goods delivered. We have accounting entries at this stage where we debit customer and credit cash account. Transaction code for billing in SAP is VF01.

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