What is Order to Cash and Procurement to Payment in SAP – OTC or P2P

SAP FICOAll business processes are integrated in sap to deliver end result that is required for your organization. You can broadly divide your Organization business process into two parts;

  • Order to cash
  • Procure to Pay

Order to Cash

Order to cash is a general business process that followed in all type of businesses. In SAP this process is mapped well to deliver you the requirement.

Processes of OTC

  • Requirement of customer arises
  • Sales order created based on customers requirement
  • Credit management reviewed the sales order
  • Order confirmation
  • Delivery processing
  • Post Goods Issue
  • Billing
  • Cash received

So the OTC process starts from receiving an order and ends with the cash received from customer. Order to cash process in sap is also called OTC or O2C. 

Order to cash relates to the business process of sales and distribution module. This process is integrated with the financial accounting module by which accounting documents are posted to SAP FI module.

Procure to Pay

Procure to pay is another business process in sap which is managed in Material management module. Accounting documents generated in procure to pay business process are integrated with financial accounting module of sap.

Processes of Procure to pay

  • Request for goods
  • Create purchase order based on the request of goods
  • Approve the purchase order / release the purchase order
  • Goods receipt from vendor
  • Invoice receipt from vendor
  • Payment to vendor

Procure to pay starts from your procurement requirement and ends at payment to the vendor from whom you have procured these goods

Both order to cash and procure to pay business processes are linked to Financial Accounting module of SAP. Accounting document are created at the relevant points of the business process and posted to financial accounting module to record it in sap.

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