Order to Cash

O2C (Order to Cash) is the blueprint of how a company conduct the entire sales process.  This is a business process that describes the mechanism and the obligation of the company in order to complete the transaction.  This touches the Account Receivable portion of the business that impacts revenue.  This is also easily one of places where the organizations start to generate most of its data in NetSuite.  So, here is the breakdown of the process in more detail...

Sales Order

NetSuite designed the O2C process by starting out in a non-posting Sales Order record (to start creating sales order you can global search 'Enter Sales Order').  In the sales record, there are a few major data points worth pointing out.  The obvious is the subsidiary the customer is buying it from, keep in mind that you can have more than one company doing business through NetSuite (you might not now but in future times).  Next is the customer who is making the purchase.  Then there is the item that the customer has placed.  Within the items you have the sell price, the location, sales tax (if any), and the quantity.  Note that not all fields discussed here are mandatory fields, but it would be helpful to have it here.  These are the fundamentals of what put a sales order record together.  Once you hit Save, NetSuite will create your sales record with an unique internal ID then stored it in your NetSuite database.  Great, now you have a sales contract between the company and its customer.

Addition to Sales Order capability, you may consider putting in an pre-sales process that capture prospects' activities.  This is the Opportunity to Order process for the sales team where NetSuite gives you the Opportunity and Estimate (Quotes) before going into a commitment.

Item Fulfillment

At this point your Sales Order status is Pending Fulfillment.  Typical & logical next step is you are obligated to fulfill the order that customer has placed (some company may choose to switch up the order of actions due to the nature of their business, NetSuite does allow bill before fill, for instance).  Item Fulfillment is a posting transaction record in NetSuite that has an Accounting impact, it also has to come from a sales order, it cannot be standalone.  In the Sales Order screen you will find the Fulfill button, click on it to carry into a fulfillment page.  The fulfillment page is pretty self-explanatory, you will need the location it is filled from and the quantity you are delivering.  Again, once you hit save, the item fulfillment is created with an unique internal ID then stored in the database.

NetSuite is capable for you to convert a Sales Order into a drop ship if you are setup to do so, the back end will take care of everything (as you fulfill, the drop ship only create purchase order because it has to be directly procured from the vendor due to the fact the item is already sold in a sales order).

Invoice

Now, we can bill the customer.  At this point the Sales Order status is Pending Billing.  Invoice now can be created by going into the Item Fulfillment and click on the Bill button (you may also do so from the Sales Order record page).  The Invoice record, when created from its linked parents, should have most of the information populated from the sales.  With no surprises, you hit Save and NetSuite create the Invoice record with an unique internal ID then stored it in the database.  Invoice in NetSuite is a posting transaction that has an Accounting impact, invoice can be standalone.  When you create a standalone invoice it will simultaneously deduct your inventory level.

Payment

Next is the part we are all waiting for, collect customer payments.  At the moment, the Invoice status is Open.  On the Invoice page, you will see the Payment button and you click to open into the Payment record page.  There are certain setup that can be done to the payment for Accounting purposes; in general, payments can be any amount, in any form of cash, check, or credit card the customer sent to the company and it should get applied to invoices of your choice.  Once you hit Save, the Payment record is created with an unique internal ID and stored in the database.  Payment record has Accounting impact in NetSuite, it can be standalone.  The Sales Order status now show Billed and Invoice is Paid In Full (you may see all the linked transaction under the Related Records sub tab), this is an indication that the sales process is complete.

Return Authorization

In an event that customer do not want the item for some reason, a return can be generated to handle this.  You can start the return by going into the Sales Order record then click Authorize Return.  RMA itself in NetSuite is non-posting, it does generates Item Receipt and Credit Memo (which both is posting transaction and have Accounting impact).

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