Quote to Cash

What is Quote-to-Cash?

Quote-to-cash encompasses all business processes and activities from when a vendor first creates and sends a quote to a prospect to when they receive payment for the closed deal. It comprises sales, account management, order management, billing, and accounts receivables functions.

Also referred to by its abbreviations — QTC and Q2C — quote-to-cash begins with a member of the sales team, who creates a quote by entering customer information and product configuration into an automated quoting tool.

Once the customer accepts the quote, the seller, buyer, and quote move through several more steps before reaching completion.

In its simplest terms, there are three components of the QTC process:

It helps to think of quote-to-cash as a very large subset of a business’s sales process — aside from prospecting, outreach, and the first sales demo, quote-to-cash practically makes up the rest of it.

However, QTC also includes the backend processes like entering customer orders, invoicing, managing payments, and collecting receivables.


  • Q2C
  • QTC

Common Q2C Challenges

Since quote-to-cash is such a large portion of the sales cycle, it shares many of the same challenges with its larger counterpart.

Lost Sales

Time kills all deals — according to research from TAS, it takes twice as long to lose a deal as it does to win one. The longer the sales cycle, the more time prospects have to:

  • Find an alternative solution
  • Forget about their buying decision
  • Get tied up in other projects
  • Realign their company budget

The average B2B sales cycle is 102 days from lead to close. For enterprise contracts and complex product configurations, it’s much longer.

Although most of that time is spent on lead nurturing and qualification, quote-to-cash still takes at least one month more often than not.

Inaccurate Quotes

Quoting inaccuracy adds unwanted friction to the sales process. It makes sales reps look disorganized and untrustworthy and turns off prospects, who see continuous back-and-forth as a hassle.

  • Quotes sent out without proper approval reflect poorly on the sales team and can lead to serious financial repercussions.
  • Those with incorrect product data misrepresent product availability and cause problems with order processing and fulfillment.
  • If the prospect is on board with the initial price quote, changing it post-agreement could cause them to lose interest.
  • Misstatements in contract terms can lead to legal issues for the business and put them at risk of fraud or non-payment.

Suppose a sales rep creates a quote for a new prospect and mistakenly includes a bulk discount that no longer meets the company’s pricing rules.

The prospect agrees with the quote and is happy with the discount, so the sales rep begins to work on a contract. When the contract is ready for final approval, it’s rejected.

The sales rep has no choice but to go back to the prospect days later with an offer that may be substantially more expensive than originally promised. Not only does this put a strain on the customer relationship, but it may lead to lost business.

Billing Errors

Billing errors can occur when orders are manually entered into the system or if there is a miscommunication between the sales team and billing teams. They frequently lead to revenue leakage, involuntary churn, and customer dissatisfaction.

Inaccurate billing comes from a few different sources:

  • Manual errors, such as typographical mistakes in invoices, or data entry errors that cause duplicate charges or incorrect amounts on an invoice.
  • Incomplete or missing data, like when a customer provides incomplete payment information.
  • Mismatched order and billing data due to incorrect product specifications.
  • System errors, such as when the billing system fails to calculate discounts or taxes properly.

In the best-case scenario, billing errors only cost the organization a little bit of time. But chargebacks, disputes, late payments, and lost customers end up costing businesses long-term revenue, considerable fees, and their credibility.

Payment Delays

Payment delays, like billing errors, cost businesses time and money. Late payments can occur when customers don’t understand the bill or have a dispute with it, or if payment policies are too rigid to accommodate customer needs.

It’s not uncommon for receivables processes to span days or weeks, meaning sales reps wait a considerable amount of time for payment confirmation before closing a deal.

Invoicing delays can lead to customer churn, as customers quickly lose patience with businesses that don’t have their money together.

The longer it takes for businesses to collect payment on outstanding invoices, the deeper into the hole they go — and the harder it becomes to get out.

Poor Customer Experience

60% of buyers say they’ll become loyal customers after a personalized buying experience, but achieving this is a lot more difficult than it seems.

During the quote-to-cash process, customers also need visibility into their orders, invoices, and payments. And since they’re the ones paying for goods and services, they should be able to access all of this information on their own.

Customers that don’t understand their bill or have to deal with disputes will probably be unhappy.

When customer service teams spend too much time on manual processes or lack the resources to respond to customer requests in a timely manner, customer satisfaction suffers (and so does revenue).

Overview of the Quote-to-Cash Process

Although the QTC process can be grouped into three primary components, there are actually several more steps before reaching completion.

Opportunity Management

When a lead becomes a sales opportunity, they have demonstrated a clear interest in the product or service and show potential to close. They’re already qualified and have often seen a sales demo (or at least spoken to a sales rep).

As it pertains to QTC, the main challenges with opportunity management are speed and engagement. According to one study by Lead Connect, 78% of buyers completed their purchase with the vendor who responded first. Other research finds a lead response time of one minute increases the chances of a Closed Won deal by 391%.

Of course, the first step is to respond to the lead in the first place — buyer enablement content, like case studies, product overviews, and pricing sheets, can help engage the customer without needing to assign a sales rep right away.

Product Configuration

Product configuration describes the process of customizing products and services to fit customers’ needs. Buyers can choose additional features, upgrades, and other components to round out their purchase.

Most companies, in some way, sell complex products. Whether it’s a completely custom physical product or a SaaS platform with tiered pricing and microservice add-ons, every sale entails some degree of product complexity.

To ensure accuracy in product configuration, sellers need to constantly cross-reference with inventory systems, databases, and pricing rules. Integrated ERP, CRM, CPQ, and inventory management data streamlines the process, helping organizations reduce manual data entry and ensure timely delivery of goods or services.


After product configuration, the seller will calculate a price, the company’s CPQ system will do it automatically, or some elements of both will apply. Pricing is fluid, with discounts and renewals factoring into the equation, and price adjustments are common after a quote is accepted.

Accurate pricing is critical to the QTC process because it sets the precedent for future steps. A huge mistake in pricing could derail the entire sales cycle going forward. That’s why it’s important to get approval from company leadership before spending the time turning the final price into a quote.


Quoting and pricing are often lumped together, but there is a major distinction between the two.

In the quoting process, the sales rep takes their prospective customer’s product configuration and proposed pricing and turns it into an official quote. This step can take a few minutes or days, depending on the complexity of the customer requirements.

The goal of quote creation is to provide customers with a document that summarizes all necessary information in a digestible format — including product description, pricing, payment terms, total cost, and more.

When done right, a sales quote establishes a common understanding of the proposed product or service between the customer and seller.

Negotiation and Contract Management

Since a quote has many of the elements required for a sales contract, contract creation is fairly easy once the prospect accepts the quote. If the company has default content, formatting, basic terms of working together, and policies, then it’s nearly automatic.

Beyond that, there are a few critical stages of contracting:

  • Negotiation. The most critical activity is negotiating specific contract terms. The average B2B sales cycle has as many as 10 decision-makers, each of them with different preferences, requirements, and constraints. They also have different day-to-day lives outside of contract negotiation, so the seller is tasked with managing communication between each of them and keeping them on the same page.
  • Agreement and signature. Once all parties agree on the contract, it needs to be signed. For this, digital signature technology speeds up the process by automating document signing and reducing paperwork.
  • Execution. The contract is now in effect and service is ready to be carried out, which is where the quote-to-cash process really comes alive — orders are placed and shipped, invoices are sent out, and payment is made.

The contracting process requires alignment between internal teams (deal desk, sales, legal) and decision-makers. For this, modern CPQ solutions provide tools for collaboration and transparency.

Order Fulfillment

Assuming product information, configuration, and availability reflect the vendor’s abilities to meet the new customer’s needs, the order fulfillment process begins.

At this stage, products or services are made ready for delivery to the customer. This might include a physical product being shipped, a digital download code being sent over email, or any other number of execution processes.

The goal is to make sure the customer receives what they’ve ordered as quickly and efficiently as possible. This is a crucial step in the quote-to-cash process, as it helps ensure customer satisfaction and an overall positive experience.

Billing and Revenue Recognition

The billing process includes issuing invoices to customers, setting up payment terms, and collecting payments.

Invoicing and Billing

For one-time purchases or subscription services that are billed immediately, this process is fairly straightforward. Invoice formats should be itemized, user-friendly, and efficient for customers to understand and pay quickly.

In the case of recurring billing, there’s a bit more complexity involved — especially when it comes to managing multiple contracts with varying payment frequencies and terms. Automated billing solutions make it easier, helping organizations streamline the invoice-to-cash process.

Revenue Recognition

The revenue recognition process is complex because it requires companies to comply with Generally Accepted Accounting Principles (GAAP).

Accurate revenue recognition is one of the biggest challenges for companies, especially those selling contracts where the payment and product or service provided don’t necessarily sync up.

Revenue recognition also affects the way companies report their financials, including profits and losses — which makes it an especially time-consuming process to get right.

According to IFRS 15 (for international organizations) and ASC 606 (for US companies), businesses need to recognize revenue when it’s “realized or realizable” — meaning, when the customer has received the product or service they purchased and paid for.

When done correctly, this process provides organizations with more accurate financial reporting and gives them better visibility into their cash flow.

Contract Renewals

High contract renewal rates position companies to meet (or exceed) their revenue goals. It costs five to seven times as much to acquire a new customer.

The renewal process is essentially the same as the quote-to-cash cycle, but with a few tweaks — such as a streamlined pricing negotiation based on existing customer data.

In addition to using automated processes and CPQ solutions to streamline renewals, organizations should focus on providing high-quality service and support throughout the product or service lifecycle to build customer trust and loyalty, which are key factors in renewing contracts.

Benefits of an Automated Quote-to-Cash Process

An efficient QTC process makes it easier for sellers to sell and buyers to buy. It creates trust and understanding between the two parties, which leads to more successful sales cycles. That’s all possible with the help of automation.

Increased Productivity

Depending on which data you look at, the average sales rep spends between 22% and 28% of their time selling. By definition, the average sales force isn’t “productive” by any means.

Quote-to-cash efficiency accelerates the sales process by helping companies send out quotes quickly, streamline contract creation and e-signature, manage billing and payments (as well as invoicing errors and disputes), and renew as many contracts as possible.

A well-defined QTC process eliminates the manual and repetitive steps required, giving sales reps the power to close deals faste and focus on revenue growth activities like prospecting and nurturing relationships with existing customers.

Lower Costs

QTC efficiency reduces the time sales reps spend on laborious manual tasks like paperwork and data entry. It also minimizes errors, late payments, and disputes — all of which cost companies money.

An automated QTC process saves organizations time and money by streamlining processes across departments (e.g., sales, legal, finance), providing accurate data to teams in real-time, and eliminating the need for document storage or manual auditing.

Faster Time to Revenue

At the end of the quote-to-cash process is “cash” (i.e., revenue). Moving prospects through the sales cycle quickly helps organizations increase their revenue and improve cash flow.

An automated QTC process eliminates delays in pricing, quoting, contracting, and execution, enabling companies to book revenue faster — which helps them move closer to their financial goals.

Higher Customer Satisfaction and Retention

Throughout the customer journey, buyers want personalization, self-service mechanisms, and a frictionless experience. Companies with a well-defined, software-backed QTC process gives them exactly that.

Every step of the way, from fast response times and personalized quoting to order status visibility and automated billing, buyers are more likely to stay satisfied with a business that makes their lives easier (something 77% of buyers don’t seem to think is very common).

The Importance of CPQ in Quote-to-Cash

The CPQ process is arguably the most critical element of QTC, since it sets the precedent for customer/vendor relationships. Mistakes in configuration, pricing, and quoting processes can lead to costly disputes between customers and vendors later on, so accuracy is key.

Autoamtion with CPQ software helps businesses create accurate quotes faster, preventing the sales team from spending hours on manual data entry tasks or having to pull up old contracts to reference terms and conditions.

It’s also responsible for pricing accuracy, product configuration, and quote generation, and it uses real-time product and customer data from CRM, ERP, and inventory management to ensure each of these processes is carried out flawlessly.

After securing buy-in based on the quote terms, CPQ sets up the contract management process nicely. Since CPQ software is integrated with legal documents, contracts remain up to date, and any changes or updates are automatically reflected in the next quote.


What is the difference between order-to-cash and quote-to-cash?

Quote-to-cash and order-to-cash have similar processes, but quote-to-cash also includes quoting, pricing estimates, negotiation, and contract management steps that are not part of order-to-cash. In that sense, order-to-cash is a subset of quote-to-cash, which begins after a quote becomes an order.

Why are contracts a critical part of quote-to-cash?

Contracts are a critical part of the quote-to-cash process because they ensure both parties have agreed to the terms outlined in the sales quote and provide legal protection in case those terms are breached by either party. Without contracts, businesses would be exposed to numerous risks in their sales activities.

CPQ Integrations