Quote to Cash Process: What It Is, Benefits & Examples

Suppose Rose and Lily is a company that manufactures and sells cosmetics products. Jenny is a prospective buyer who wants to purchase a large volume of cosmetic products for her business. She reached out to Rose & Lily’s salespeople to ask for a quote for the products she wanted to purchase. The company had an automated Q2C process that started with quote-to-cash process offering Jenny the quotation and ended when the company received the payment from her.

Improved Data Accuracy and Decision-Making

The order-to-cash process includes all actions required to process customer orders and deliver the products and services to fulfill those orders. It involves numerous business functions such as inventory management, operations, and production. It encompasses everything from order management, fulfillment, and shipping, to invoicing and payment collection.

• Put simply, order-to-cash is a subset of the broader Q2C process—it deals specifically with the operational aspects from order to cash.
• QTC, on the other hand, incorporates all the steps in contract management including contract creation, negotiation, execution, and revenue recognition.
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• It is imperative to centralize all of the sales contracts, monitor their duration in a timely and consistent manner, and keep track of changes to costs, terms, and conditions.
• The business assesses the creditworthiness of the customer to minimize financial risk.

What Are the 8 Stages of Order to Cash Processing?

This speed and efficiency make it easier for customers to do business with your company, which can result in higher win rates and shorter sales cycles. The quote-to-cash process is vital for companies seeking to streamline their overall sales operations and enhance customer satisfaction—and for MSPs, the process is particularly significant. Effectively managing your quote-to-cash flow chart allows businesses to accurately price their services, create detailed contracts, efficiently deliver services, and promptly invoice clients. While O2C processes help to reduce inherent complexities found in the O2C lifecycle, it doesn’t include the configuration of products and services, pricing or creating and sending the quotation. This is why order-to-cash vs quote-to-cash are both critical steps in revenue generation. In contrast, OTC kicks in only after the sales quote has been accepted, focusing primarily on the fulfillment side — order processing, shipment, invoicing, and payment collection.

• It provides valuable insights into the mechanics that drive the path from generating quotes to converting them into tangible cash flow.
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• Improving the customer lifecycle journey begins well before they actually become a customer.
• Larger companies typically rely on technology to streamline order fulfillment—for example, using instant order notifications and automated inventory management software.
• In fact, that’s just the tip of the iceberg, and what comes next can be even more complex.

OTC leaves out the process of Configure Price Quote (CPQ)

At Chargebee, we have this mantra – “Think, negotiate, convert, and collect with the click of a button,” to show how easy the sales process should be. There is often confusion between the quote-to-cash (QTC) vs order-to-cash (OTC) processes. Salesforce has a comprehensive help section with clear documentation, good examples, Trailhead courses for each individual process, and videos walking you through them. If you’ve settled on a system, you can get a Accounting for Churches specialist in that specific software. For example, if you’ll be using Salesforce CPQ, you can hire someone with Salesforce-specific knowledge, experience, and certifications. Take a look at what sophisticated configuration looks like with a familiar backdrop the Logik.io guided demo.

Automation in quote configuration and pricing Certified Public Accountant reduces manual errors and operational costs, leading to more accurate quoting and faster approval processes. The evolution of QTC systems in today’s digital economy redefines how businesses engage with customers and optimize revenue operations. Industries like data centers are undergoing a transformative shift, moving from traditional one-time sales to subscription-based services.

Redesigning Quote-to-Cash: Ashish Hota’s AI-Powered Vision for Seamless Customer Experiences

CPQ enables sales employees to customize products, establish the proper pricing, and generate attractive customer quotes. On the other hand, Q2C is a meticulous technique that includes everything from creating proposals to handling final settlements. Optimizing your LTC, QTC and OTC processes is imperative to maximizing cash flow, maximizing internal operation efficiency, and providing higher customer satisfaction. If you feel that your processes are less than optimal, please reach out to RESPEC at and our consultants will be happy to assist you toward higher profits. Efficiency and accuracy are important for O2C, and businesses that reengineer their O2C process increase their revenues by 1%–3% a year. All of these things are done before the OTC process but play a major role in deal size and cycle time.

Customer relationship management

Staff spend hours rekeying order data, invoices, and other documents instead of focusing on customers. Understanding the nuances between Order-to-Cash (O2C) and Quote-to-Cash (Q2C) is crucial before changing anything in either process. While both are integral to the sales cycle, they cater to different stages of customer interaction and completion of a sale. This holistic strategy encompasses all of the steps involved in a traditional sales cycle. As has been mentioned that order to cash is considered the subset of quote to cash because the Q2C process involves pretty much everything. These two processes are interconnected and work hand in hand to ensure a smooth transition from generating a quote to collecting cash for the goods or services delivered.

How does the order-to-cash process work?

• This process starts with generating a customer quote, which involves detailing product offerings, pricing, and terms.
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• This helps to build trust and loyalty, which are vital keys to retaining customers over the long term.
• Chargebee’s contract management can help you set, automate, and enforce contract terms from within your subscription management software.

Whether the order comes through your ecommerce platform, a signed contract, or an email to the sales team, the order management processes should kick in as soon as the purchase is confirmed. Gaining new customers for your business is a big accomplishment that requires cross-functional effort by numerous teams. However, the hard work doesn’t stop when you close the deal or a customer places their initial order. In fact, that’s just the tip of the iceberg, and what comes next can be even more complex. Verify important details like product specs, quantities, pricing, and delivery needs. Building a quote-to-cash process supports your organization’s seamless and efficient flow of information and activities—reducing errors and enhancing customer satisfaction.