The OTC Cycle is one of the foundational business processes of SAP. It covers the business from getting the order from the customer to closure with payments. It has 3 main sub-processes – Presales, Order Processing and Invoicing.

Presales include Inquiry and quotation followed by Sales order creation, Availability check, and Order confirmation. These steps start with the customer’s due diligence and end with sales order confirmation by the business. Once the Sales Order is confirmed, Order Processing comes into the picture. Order processing involves picking and packing of products, shipping readiness, selection of transport carrier, goods issue, and concludes with delivery confirmation after the delivery is done. After the delivery is completed and confirmed, the business moves to the invoicing part of the process. An invoice is generated and sent to accounting, and the customer is expected to pay the same.

From an ERP point of view, OTC is an integration of Sales and Finance. It plays an important role in improving sales, smoothening order management, and hassle-free billing. Although the most common usage of the OTC cycle is in the retail sector, basically any customer-facing business can leverage it to improve efficiency.

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