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The Quote-to-Cash Process in 10 Steps

7 min read

The quote-to-cash (QTC) process is an important one. It touches every end of a business transaction—from configuring a quote and drafting a proposal, to when payment is received for services rendered. This important process drives revenue for the entire organization and encompasses many sales, account management, order fulfillment, billing, and accounts receivables functions. Simply put, the quote-to-cash process connects a customer’s intent to buy (the CRM) to a company’s realization of revenue (in the back-end ERP system), encompassing the entirety of its sales, contract, and customer relationship lifecycles.   

Historically, these processes have been disconnected and siloed, often managed in multiple files and systems, leading to manual and inefficient sales cycles—ultimately putting what is important (the deals and customer experience) at risk.   

Optimizing these highly collaborative aspects of your business brings visibility throughout your organization, speeds up sales cycles, and closes a higher percentage of your deals. 

What is QTC? The 10-step guide 

The quote to cash process in ten steps.

Here are the ten steps of the QTC cycle that can take you from the opportunity stage through revenue recognition:  

  1. Configuration  
  2. Pricing  
  3. Quoting  
  4. Contract Creation  
  5. Contract negotiation  
  6. Contract execution  
  7. Order fulfillment  
  8. Billing  
  9. Revenue recognition  
  10. Renewal  
1. Configuration 

The first stage in the QTC process is configuration, where the goal is to identify the right combination of products and services to meet your customers’ needs.  

In the modern business environment of increasing product and deal complexity, identifying the right combination of goods and services to recommend to the customer is essential to winning the deal. By automatically providing these recommendations to your sales reps, you can ensure that all your sales reps become configuration experts—and sell like the top 20%.  

2. Pricing  

During the pricing step, uncover the best pricing and quoting strategy to increase win rates and maximize deal sizes.    

In the QTC world, pricing refers to the rules that dictate how sales professionals can best price a deal and what other incentives can be offered to customers. Identifying the right price for your products is only half the battle. Identifying the correct set of discounts, promotions, and incentives that win you the customer—without cutting into margins—is essential to driving revenue. By uncovering the pricing and promotion strategies that were successful in the past, sales reps can apply that winning strategy to future deals, increasing win rate and maximizing deal size.  

 3. Quoting 

With the quoting phase, your teams can create on-brand and error-free quotes that delight your customers.    

Quotes are one of the most important steps in your sales cycle and often serve are your customer’s first impression of your business. While presenting a quick and accurate quote can win you a deal, an error-riddled and delayed quote can lose you a customer. To create the optimal customer experience, it is imperative that you present a quote quickly while ensuring that it is error-free and on-brand—all of which can be a difficult balance without automated solutions.   

4. Contract creation 

The next phase in the QTC process is creating secure contracts that capture deal details and allow for visibility for all stakeholders who need it.    

All deals end with an agreement that includes a set of agreed-upon terms and conditions. These agreements can carry a lot of risks, and can seriously impact your revenue streams. When it comes to protecting your business, the details matter. As contracts are created, it’s important that the right people have visibility into built-in clauses (renewal and termination clauses, for example), the approval process, contract execution and renewals, and more to ensure your legal team is signing off on sound deals.  

5. Contract negotiation 

Contract terms and clauses are redlined and changed during the contract negotiation phase.  

If you have ever been involved in contract negotiation, you know it is a living, constantly changing document, riddled with redlines and the need to track multiple versions. Once you begin the contract negotiation phase, it’s critical to get detailed visibility into what is changing in your contracts as they go through multiple iterations. Automatically providing this information and visibility to your legal team can cut down on the needless tasks that waste the time of busy legal professionals.  

6. Contract execution 

Next up in the QTC process is contract execution, where you can obtain the approvals you need with an eSignature tool on the final contract.    

A significant roadblock in many companies’ sales cycles, effective contract execution, can slow down the revenue cycle and impact your time to revenue. But, by enabling an eSignature solution, you can drastically reduce the time spent obtaining signatures to finalize contracts. An effective eSignature tool can provide visibility into where the contract is in the process, current roadblocks, and which parties have yet to sign so you can plan your follow-ups accordingly.   

7. Order fulfillment 

Once the contract has been signed, operations can jump into gear to ensure that the right products are promptly delivered to the right customers. An automated and integrated system that provides visibility and one connected view of the customer’s journey can ensure that the changes to the order and requirements are reflected in the final product delivery. An end-to-end QTC solution will ensure that the agreed-upon quotes, pricing, and contracting terms are communicated to the necessary parties, and connected to your ERP system.  

8. Billing 

Calculate charges instantly and send the invoice to the customer to ensure on-time payment during the billing phase of the QTC process.  

Accurate billing is critical to your company's success, as it determines cash flow, allows for accurate forecasting, and revenue recognition. Billing is easy with a seamlessly integrated quote-to-cash process—everything captured in the quote (details such as discounts, billing timeframes, etc.) and in the contract are automatically passed on to your accounting team, which guarantees accurate billing and renewal information.  

9. Revenue recognition 

Receive payment and recognize revenue accurately.    

Recognizing revenue incorrectly carries a lot of risks. When important details in your contracting terms—like pricing, net payment terms, and delivery schedules—are made available to your accounting department, your company will be more likely to recognize revenue correctly.   

10. Renewal 

The last phase of the quote-to-cash process is managing customer retention and recurring revenue.    

Especially with the SaaS model, a large percentage of revenue comes in the form of repeat and subscription customers. This means that it is vital to stay on top of your contracts and know when your customers are up for renewals. With insights into your quotes, contracts, and renewal data, your business can effectively identify expiring contracts, upsell and cross-sell current customers, and reduce churn.  

Who owns the quote-to-cash process 

A defining aspect of QTC is that it isn’t owned by one single person or department, but by multiple teams, including sales, delivery, finance, etc. While each team has its own specific role or function within the process, all departments must work together for the process to be seamless. 

By employing a QTC solution, you can easily, and seamlessly manage all the independent actions that make up the QTC cycle. This enables your salespeople to deliver accurate information to clients efficiently, minimize order and invoicing errors while improving your data analysis and forecasting efforts. 

How to find an all-in-one quote-to-cash automation solution  

Keeping track of each individual process in different systems is time-consuming and can result in vital information in the process being lost or completely forgotten. That’s why your business needs a holistic QTC automation solution that will help your sales processes, allow for greater visibility from all the stakeholders involved, and improve your time to revenue.   

When searching for a solution, keep these key elements in mind:   

  • Creating documents manually outside of your systems can be tedious
  • Save time creating documents with automated document generation software  

Plus, it increases the risk of data entry errors. If you send proposals, quotes, contracts, and other vital documents outside of your systems, you are losing visibility into where the document is in the process.   

With solutions like Conga Composer, your teams can quickly build fully customized, branded, and personalized documents. What’s more, eliminate manual document tasks to reduce errors and improve tracking and customer communication.  

Increase visibility into the contract process with a contract lifecycle management solution 

The contract process is vital and can be complex and time-consuming. Streamlining and automating this process is key in improving the revenue cycle while simultaneously maintaining control over contract terms and clauses, so your legal team is signing off on good deals.  

With Conga’s end-to-end contract management solutions, you can improve the customer and user experience while increasing visibility and speeding up sales cycle times, all while lowering the risk for your company.  

Benefits of quote-to-cash 

The key benefit every quote-to-cash process should provide is efficiency. After all, efficiency has a direct impact on the bottom line. Longer, slower quote-to-cash processes take up more resources, drive up costs, and block the ability to predict, monitor, and realize expected revenue from the service delivery. 

It also provides relationship substance. A dysfunctional quote-to-cash process can convince customers to switch to competitors that promise a better experience. However, with a seamless QTC process, organizations see better customer retention and avoid customer confusion. 

For example, with Conga CLM, you’ll be able to establish an efficient approvals process that automatically notifies customers and other stakeholders when their attention and signature are required. 

Using reliable software will allow you to streamline, standardize and optimize the quote-to-cash process and overall end-to-end revenue lifecycle. 

Streamline the quote-to-cash process with Conga’s end-to-end solutions  

At the foundation of your quote-to-cash management process is automation. Automation makes it possible for teams to efficiently and accurately execute all the tasks required in the process. Solutions that streamline your team’s workflow, and integrate seamlessly with your Salesforce CRM, all while providing a great customer experience, will increase your time to revenue and have your teams working more efficiently.   

Learn how revenue management solutions like Conga can help you navigate the QTC process and effectively collect revenue, predict budgets, and efficiently manage billing and customer agreements. 

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