What is Segregation of Duties (O2C)?

Definition

Segregation of Duties (O2C) is a critical internal control principle applied within the Order-to-Cash process to prevent errors, fraud, and operational inefficiencies. It ensures that key tasks, such as order processing, billing, cash collection, and reconciliation, are divided among multiple individuals to reduce risk and maintain accountability.

• Aligns with Segregation of Duties (Workflow View) to enforce role-based responsibilities in the O2C process.

• Supports Segregation of Duties (Vendor Management) to prevent unauthorized transactions with vendors.

• Integrates with Segregation of Duties (Journal Entry) to safeguard financial reporting and accounting accuracy.

• Coordinates with Segregation of Duties (Fraud Control) to detect and mitigate potential fraud risks.

• Links to Segregation of Duties (Data Governance) to maintain integrity and compliance of O2C-related master data.

Summary

Segregation of Duties (O2C) enhances internal controls by dividing responsibilities across the Order-to-Cash cycle, reducing fraud risk, ensuring financial accuracy, and supporting compliance with organizational and regulatory standards.