Order to cash business processes
In Dynamics 365 Supply Chain Management, the order to cash process is a critical part of the overall business workflow. A high-level flow of the order to cash business process in Dynamics 365 Supply Chain Management is as follows:
Order entry - In this first stage of the process, you enter customer orders into the system by:
Entering them manually or having the system enter them automatically through integrated channels, such as e-commerce platforms.
Using various methods, including the creation of sales orders, sales quotations, or sales agreements in the Dynamics 365 Supply Chain Management system.
Order processing - After you enter orders into the system, they undergo processing to ensure accuracy and completeness. During order processing, you also complete the following steps:
Verify customer information.
Check product availability in inventory.
Confirm pricing and discounts based on predefined rules and agreements.
Order fulfillment - This next stage of the process involves picking, packing, and shipping the ordered items to the customer. Dynamics 365 Supply Chain Management provides tools for managing warehouse operations, including picking routes, packing strategies, and shipping carrier integration.
Invoicing - In this stage, the system generates an invoice and sends it to the customer. Keep in mind the following factors during this stage:
In Dynamics 365, the system can generate invoices automatically based on predefined billing rules, or users can create them manually.
Invoices contain detailed information about the products or services provided, pricing, taxes, shipping charges, and payment terms.
Payment processing - After the customer receives the invoice, they can make a payment according to the agreed-on terms. Additional information to keep in mind during payment processing:
Dynamics 365 supports various payment methods, including credit card processing, bank transfers, and check payments.
You can record and track payment information in the system.
Accounts receivable management - As you receive payments and record them in the system, the system applies them to the corresponding invoices. Dynamics 365 provides tools for managing accounts receivable, tracking outstanding balances, and generating aging reports to monitor payment statuses.
Revenue recognition - When you receive payment and complete the transaction, you complete revenue recognition in the company's financial records. Dynamics 365 supports revenue recognition processes, ensuring compliance with accounting standards.
Order closure - In this final step, you close out the order in the system, marking the completion of the transaction. The system archives closed orders for future reference, and Dynamics 365 stores associated documentation for audit purposes.