Order-to-cash in logistics
Order-to-cash (O2C) is the full chain that turns a customer’s order into money in your bank account. In logistics this chain is unusually long, with many handover moments — and every handover is a place where margin leaks.
A healthy O2C in transport runs from quote through dispatch through execution through invoice through payment, with data flowing forward (not retyped) at every step.
The full chain
- Quote – customer asks for a price, you respond with a rate based on tariffs, zones and surcharges.
- Order – quote accepted, becomes an operational order with stops, cargo and revenue lines.
- Planning – stops and shipments assigned to vehicles and drivers.
- Execution – trip runs, status updates flow back, POD captured.
- Cost & revenue capture – actual costs (carriers, fuel, tolls, wait time) booked against the trip; revenue confirmed.
- Revenue control – revenue lines reviewed and approved.
- Invoicing – approved revenue grouped into outgoing invoices per customer.
- Payment & dunning – invoice paid (or chased).
- Reconciliation – payment matched to invoice, margin closed.
In Routix this maps to Quotations, Orders, Dispatch, Cost & Revenue, Revenue control and Invoices.
Where money leaks
| Stage | Typical leak | Cost |
|---|---|---|
| Quote → order | Quoted rate not copied to order | Wrong invoice value |
| Order → planning | Surcharges not flagged for execution | Lost accessorial revenue |
| Execution → costs | Carrier costs entered late or estimated | Wrong margin per trip |
| Execution → revenue | Wait time, extra stops not captured | Lost revenue |
| Costs → invoice | Missed cost lines surface after invoicing | Margin overstated, then corrected |
| Invoice → payment | Disputes due to missing POD or wrong data | Delayed cash |
Most operators lose 2–8% of revenue here without seeing it. The smaller the leaks, the closer you can quote to cost.
Days Sales Outstanding (DSO) — the headline KPI
DSO = average number of days between invoicing and payment. In European road transport it typically sits between 40 and 70 days. Every day above industry average is working capital you’re financing for your customer.
Drivers of high DSO:
- POD missing or unsigned.
- Invoice doesn’t match the quoted order.
- Disputed accessorial charges.
- Manual invoicing causing delays from POD to invoice issue.
How a TMS shortens O2C
- Quote-to-order copy so the price agreed is the price invoiced.
- Cost & revenue per trip so margin is visible before invoicing, not after.
- POD digital and linked so disputes are rare and fast.
- Invoices generated from approved revenue lines — no retyping, no Excel.
- API to accounting / ERP so cash flow lands in finance immediately.
Routix is built around this chain end-to-end. See TMS vs ERP for where the boundary with your finance system sits.
Related concepts
See this in Routix
To follow the full order-to-cash chain in one product, start on www.routix.com and then move through Quotations, Orders, Revenue control and Invoices. That path is the practical Routix version of quote, execution, approval and billing.
