Order to Cash: from accepted order to payment

Order to Cash connects a customer commitment to fulfillment, billing, payment, and collection. Use this workflow when an accepted quote or order must become a delivered sale and a settled customer balance. Sales, the warehouse, customer service, and finance each need to know when their part is ready and what record they hand to the next team.

Where this workflow fits

The workflow begins with an accepted customer order and ends when the related invoice and payment are accounted for, or when an open balance has an assigned collection or dispute action. It suits distributors, e-commerce sellers, and manufacturers that fulfill customer orders. Recurring billing and service repairs have additional steps described in their own guides.

Featured capabilities

• Sales orders hold the customer, products, prices, ship-to details, terms, and promised date that the next team must honor.
• Picklists and shipments connect the warehouse's physical work to the order and its fulfillment status.
• Invoices and payments connect the amount billed to the customer's payment and remaining balance.
• Dunning Schedules support an approved reminder sequence when an invoice remains unpaid.

People and preparation

Sales owns the accepted customer commitment and communicates changes. The warehouse owns the physical fulfillment result. Accounts receivable owns invoice and payment review, while customer service helps resolve delivery or pricing disputes. Before releasing an order, confirm the customer and ship-to details, product and quantity, price and tax, payment terms, promised date, and the facility that will fulfill it. Your organization decides its own credit, approval, partial-shipment, and invoicing policies.

Prepare the order

Sales owns the handoff. Create a sales order from the accepted quote or enter the order directly. Confirm the customer, delivery address, quantity, price, taxes, payment terms, and promised date with the customer before releasing it. An address warning, required approval, or credit decision belongs here, before the warehouse acts on the order.

If stock is short or the customer changes the order, agree on the next action with planning and the customer. A substitution, partial shipment, transfer, purchase, or changed date is a business decision, not simply a warehouse adjustment. Keep the order current and communicate the accepted change so the team fulfilling it works from the same commitment.

Fulfill and confirm delivery

The warehouse owns physical fulfillment. Use the order to allocate and pick the approved items, check the picked quantities and any lot or serial information that applies, then pack and ship or prepare customer pickup. Record the shipment in Versa, or document customer pickup under your organization’s process. The shipment record is the handoff to billing and to customer service if the customer asks what was delivered.

A drop shipment or third-party warehouse changes who performs the physical work. Confirm the supplier or partner's fulfillment result and record the corresponding order outcome before treating the order as delivered. For a direct supplier shipment, see Drop Shipping with Sales Orders.

Bill, collect, and reconcile

Finance owns the financial handoff. Create the invoice when the order is eligible under your billing policy. Check it against the order and actual fulfillment, including partial shipments, freight, tax, and any approved changes, then post and send it. The customer receives a clear account of what was billed, and the receivables team has an open balance to manage.

When payment arrives, record it and apply it to the appropriate invoice. Reconcile the bank activity so the receipt is supported by the actual deposit. If the customer disputes a charge or payment is overdue, customer service and finance should agree on the owner and next action. Use approved reminders where appropriate; a reminder does not resolve a delivery or pricing dispute by itself.

Decisions and handoffs at each stage

1. Accept the commitment

   Owner: Sales. Input: accepted quote or customer order.

   Work and decision: Confirm the agreed items, quantity, price, tax, terms, destination, and date. Resolve an approval or credit hold before releasing work.

   Evidence: Current sales order and, where used, its linked quote.

   Handoff: Warehouse receives one current order to fulfill.

2. Decide how to fulfill

   Owner: Sales and planning. Input: released order and availability review.

   Work and decision: Decide whether to ship as promised or agree with the customer on a partial delivery, substitution, new date, purchase, or transfer. Do not let an unresolved shortage become a pick instruction.

   Evidence: Updated order and agreed fulfillment decision.

   Handoff: Warehouse receives the approved quantity and delivery commitment.

3. Fulfill the order

   Owner: Warehouse or approved fulfillment partner. Input: approved order or picklist.

   Work and decision: Physically pick, check, pack, and dispatch the goods or prepare pickup. Compare what actually leaves with the order; resolve short picks and discrepancies before posting the outcome.

   Evidence: Picklist where used and posted shipment, or pickup evidence under company policy.

   Handoff: Customer receives the goods; billing receives evidence of what was fulfilled.

4. Bill the customer

   Owner: Accounts receivable. Input: order and actual fulfillment result.

   Work and decision: Decide what is billable under the organization's policy. Check partial delivery, freight, tax, and agreed changes before posting and sending the invoice.

   Evidence: Invoice linked to the customer transaction.

   Handoff: Customer receives the bill; collections can see the open balance.

5. Apply and reconcile payment

   Owner: Accounts receivable and finance. Input: customer remittance and open invoice.

   Work and decision: Apply the payment to the right invoice, confirm the deposit or bank line, and investigate a mismatch instead of treating the receipt alone as bank settlement.

   Evidence: Payment receipt, invoice application, and bank reconciliation.

   Handoff: Finance has a supported settled balance or a named reconciliation exception.

6. Resolve an open balance

   Owner: Collections and customer service. Input: overdue or disputed invoice.

   Work and decision: Check whether the issue is nonpayment, delivery, price, or credit. Agree on the next action with the customer and use an approved reminder only where appropriate.

   Evidence: Collection status, communication, and remaining invoice balance.

   Handoff: The open item has an owner and next action; a resolved dispute returns to payment follow-up.

Variations and exceptions

For a partial shipment, keep the unfulfilled quantity visible on the order and bill only what your policy permits; the remaining quantity returns to the fulfillment decision. In a drop shipment or third-party fulfillment path, the supplier or partner does the physical work, and the team responsible for the sales order must confirm and record the outcome before billing. A return, credit, or repair starts its own after-sales workflow and must be connected to the original transaction rather than rewriting its shipment history.

Completion and review

The accepted order, fulfillment result, invoice, payment, and bank activity should be traceable to the same customer transaction. If payment has not yet arrived, the invoice remains open with a collection owner and next action. Customer returns or repairs begin a separate after-sales process rather than silently changing the original shipment history.

For repeat invoices on an active agreement, see Subscriptions and Recurring Billing. For a serialized unit being repaired and returned to its owner, follow the RMA Service Repair and Warranty Return Workflow.