Lesson 3 of 10

Order to cash

The two most important cycles in any ERP are selling and buying. The selling cycle is called Order to Cash (O2C) and has five steps, each handled by a module:

Try it: a customer, Al Waha Store, orders 10 cartons of dates from Nakhla. Run each step and watch every module change. Notice the accounting entries the system posts automatically, without the accountant typing them:

1Quotation2Confirm3Deliver4Invoice5Payment

SalesQuotation

Sales order S00042 · Al Waha Store

Sukkari dates 3 kg10 × 60

Subtotal600

VAT 15%90

Total690 SAR

Inventory

On hand120

Reserved0

Available120

AccountingCustomer owes: 0

No entries yet.

The customer wants 10 cartons. A quotation is only a proposal: nothing changes in inventory or accounting.

Watch outThis is integration in practice: a warehouse clerk pressed “Deliver”, so the system reduced stock and posted the cost of goods in accounting. Without ERP, the accountant would wait for a paper slip at month-end.

In Saudi Arabia, for example, VAT is 15%, and the tax authority (ZATCA) requires e-invoicing (Fatoora) with systems connected to its platform in waves. So one of the first questions when choosing an ERP is: does it support local tax rules?