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OTC Interview Questions and Answers

The document outlines the Order to Cash (OTC) process, detailing steps from order entry to payment collection, and highlights common challenges such as invoice mismatches and payment disputes. It discusses the importance of credit management, dunning procedures, and integration points within the OTC cycle, as well as key performance indicators for monitoring efficiency. Additionally, it explains how SAP supports various OTC processes, including sales order management and invoice verification.

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1K views2 pages

OTC Interview Questions and Answers

The document outlines the Order to Cash (OTC) process, detailing steps from order entry to payment collection, and highlights common challenges such as invoice mismatches and payment disputes. It discusses the importance of credit management, dunning procedures, and integration points within the OTC cycle, as well as key performance indicators for monitoring efficiency. Additionally, it explains how SAP supports various OTC processes, including sales order management and invoice verification.

Uploaded by

gantiamruta03
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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OTC (Order to Cash) Interview

Questions and Answers


Q: Explain the OTC process in detail.
A: The OTC process includes all steps from receiving a customer order to collecting
payment:
- Order entry (sales order creation)
- Order fulfillment (picking, packing, and shipping)
- Invoicing
- Payment collection
- Accounting and reconciliation
It involves Sales, Inventory, Finance, and Customer Service.

Q: What are some common challenges in OTC?


A: - Delays in order processing
- Invoice mismatches
- Credit limit issues
- Delivery delays
- Payment disputes

Q: How do you handle disputes in the OTC cycle?


A: By documenting sales orders, delivery proof, and agreed terms. Collaborate with the
customer and internal teams to resolve discrepancies.

Q: What is credit management in OTC?


A: Credit management evaluates and controls the credit risk. Orders are processed only
within credit limits. SAP uses credit control areas and risk categories.

Q: How does Dunning work in OTC?


A: Dunning is the process of sending reminders to customers for overdue payments. SAP
allows configuration of dunning procedures and intervals.

Q: How do you manage partial payments and residual items?


A: - Partial Payments: Outstanding balance remains open.
- Residual Items: Original invoice is cleared and a new open item is created for the
remaining balance.

Q: What are common integration points in OTC?


A: - SD ↔ FI: For billing and accounting
- SD ↔ MM: For stock availability
- SD ↔ WM: For warehouse activities
- SD ↔ CRM: For customer service

Q: What is the role of invoice verification in OTC?


A: Ensures accuracy in billing by comparing the sales order and delivery data with the
invoice.

Q: What KPIs are used to monitor the OTC process?


A: - Days Sales Outstanding (DSO)
- Invoice accuracy rate
- On-time delivery rate
- Customer dispute resolution time

Q: What is a sales order in OTC?


A: A sales order is a document that confirms the sale of goods/services, capturing customer
details, material info, quantities, pricing, and delivery dates.

Q: How do you handle order returns in OTC?


A: Through a returns order in SAP, followed by goods receipt and credit memo generation.

Q: What is the impact of OTC on working capital?


A: Efficient OTC improves cash flow, reduces DSO, and enhances customer satisfaction
through timely collections.

Q: How does SAP support OTC processes?


A: SAP SD module supports sales order creation, delivery, billing, and integration with FI for
accounting and AR management.

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