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SAP Order to Cash (O2C) accounting entries.

Updated: Mar 12

The Order-to-Cash (O2C) or FI-SD Integration or VKOA process in SAP involves various steps, starting from the receipt of a customer order to the receipt of payment for the goods or services delivered. Below are the typical accounting entries associated with each major step of the O2C process in SAP:

1. Sales Order Creation:

  • No accounting entry generated at this stage.

2. Delivery of Goods or Services (Goods Issue):

  • Debit: Cost of Goods Sold (COGS)

  • Credit: Inventory or Goods Issue Account

3. Invoice Generation:

  • Debit: Customer

  • Credit: Revenue Account (Sales Revenue)

4. Customer Payment and Incoming Payments:

  • Debit: Bank/Cash (to record the incoming payment from the customer)

  • Credit: Customer Account

It's important to note that the above entries are simplified examples.

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