Order to Cash is a business process defined by a supplier to sell goods to a buyer.
Procure to Pay is a business process defined by a buyer to purchase goods and services they need from sellers.
Steps in the Order to Cash and Procure to Pay Scenarios
Both scenarios generally start with a buyer sending the supplier a purchase order and end with the buyer’s payment.
On the supplier side, the "Order to Cash" (O2C) process can include more transactions such as “Credit Management“, "Inventory Advice", “Order fulfillment“, “Shipping“, “Invoicing“, “Accounts Receivable“ and “Payment Collection“.
On the buyer side, the "Procure to Pay" (P2P) process can include more transactions such as “Order Management“, “Goods Receipt“, “Supplier Performance” or “Invoice Approval“.
Simplified business scenarios
To simplify this process for your first trading partner EDI onboarding with Orderful, we chose to restrict the O2C and the P2P business scenarios to two key transactions: “Order“ and “Invoice“.
If you're the supplier, you're following the O2C process and you're be receiving inbound purchase orders and sending outbound invoices.
If you're the buyer, you're following the P2P process and you're creating and sending outbound purchase orders and receiving inbound invoices.
Examples for Order to Cash and Procure to Pay business scenarios
We created two examples transactions that can be used for this business scenario:
- Purchase order (850)
- Purchase Order Acknowledgment (855)
- Invoice (810)
We explain in detail the structure of the example transactions in JSON (Orderful schema) and in X12 and the content of the example transaction. These examples can be used as a mapping exercise to build your first integration.