What is the Quote to Cash Process?

The simplest explanation of the quote-to-cash (Q2C) process is right there in the name. It is a method of tracking an organization’s end-to-end sales cycle, from the time the first quote is obtained through the time that the purchase is paid for.

Generally speaking, the Q2C cycle is a top-of-funnel process that begins after the marketing and branding processes have been completed. Organizations frequently employ quote-to-cash data to determine key performance indicators (KPI) and streamline functions such as invoicing, customer experience, accounts payable, and accounts receivable.


Find out more about our AP Automation solutions

Simplify the processing of invoices and payments while reducing costs, errors, and time-consuming tasks.

What Are the Steps of the Quote-to-Cash Process?

While not every step of the quote-to-cash process will be used every time by every organization, the following steps provide a solid overview of the general sales process. Generally speaking, your team’s approach to a quote-to-cash process should look something like this:

1. Configuring a quote

Using information gathered during the marketing and branding stages, your sales team determines the specific configuration of products and/or services you will need. This quote can be seen as an opening “hook” when attempting to attract a new customer.

2. Determining pricing

The sales team factors in elements such as promotions, discounts, and bundles or add-ons to determine a reasonable price for the transaction.

3. Creating a quote

Once a price is determined, your sales reps create a quote sheet including all of the details of the potential transaction and send it to the vendor. (These first three steps taken together are sometimes referred to as “Configure, Price, Quote (QPC).”)

4. Contract management

A formal, secure contract is drafted, either using a standard format or terms agreed upon by both parties. This legal review may be a simple formality or a lengthy back-and-forth process depending on the businesses and goods involved.

5. Order fulfillment

After the contract has been signed, the order is entered into your system for processing and delivery. Order fulfillment can be handled either manually or via an automated system that speeds up the process.

6. Invoicing and billing management

Your accounts receivable team receives an invoice that is then run through a three-way matching process, comparing all relevant invoice data against information included in the purchase order and receipt of goods or services.

7. Revenue management

Once the invoice has been processed, your financial team can begin the revenue recognition process. That means that the transaction can be officially logged and recorded in your financial system. This step can be a great help in financial planning and managing cash flow.

8. Renewing the contract

Once all payments have been processed and all goods and services have been received, it is time to start the process of renewing the customer’s contract. If your business has built a strong customer relationship, this can be an excellent opportunity for your sales team to look at upselling or cross-selling products.


P2P vs R2R vs Q2C vs O2C – The Main Differences Between the Process

Check out our infographic on the differences between the P2P, R2R, Q2C, and O2C processes, and read on as we go in-depth into each of the processes.

Challenges of a Manual Q2C Process

Quote-to-cash is an extensive process that often involves multiple teams and departments. Attempting to navigate those steps using manual processes is far slower and more prone to error than relying on an automated software solution. Even so, many organizations continue to use manual operations for at least one of the Q2C steps. A few potential challenges that come with a manual Q2C process include:

Badly configured quotes

You can’t have a quote-to-cash process without a quote, but a poorly configured or error-laden quote can end the process before it even begins. A strategic approach to pricing and an automated software solution can go a long way toward keeping your quotes accurate and competitive.

Invoicing errors

The more human touch points there are in your process, the greater the risk of human errors becomes. A manual Q2C process not only makes invoicing errors much more likely, a lack of visibility into that process also makes mistakes harder to identify and correct when they do happen. That can lead to a number of costly problems, including late payments, overpayments, and duplicate payments.

Delayed payments

Processing payments using a manual system is simply slower than relying on automation. Processing a single invoice by hand takes an average of around 25 days, compared to only three or four days with an automated system. Delayed payments create confusion both inside and outside of your organization and can result in late fees, penalties, and disruptions in your supply chain.

Revenue recognition errors

Revenue recognition is a vital element of the Q2C process because it helps your finance team make accurate projections of upcoming budgets and makes sure that your profit and loss statements are on target. The human errors that inevitably come with a manual process can have a disastrous impact on revenue recognition.

Less cross-selling and upselling

The end of a successful quote-to-cash process presents a strong opportunity for your sales team to upsell and cross-sell customers on future purchases. The longer that process takes and the more errors there are to contend with, the narrower the window gets for those conversions.

Stay Ahead of the Economic Times! Discover the Biggest B2B Payment Trends of 2023

Benefits of Automating the Quote-to-Cash Process

Investing in an automated software solution is the surest way to keep your organization’s quote-to-cash process workflow operating efficiently. Automation not only significantly increases the speed and accuracy of your Q2C process, it also provides benefits in these specific areas:

Automatic quote generation

A software solution that integrates easily with your enterprise resource planning (ERP) system can pull data from all across your ERP, eliminating the need to spend time and effort physically tracking down that information while configuring a quote.

Simplified CPQ workflow

A software solution can automate every step of the configure, price, quote (CPQ) workflow while providing opportunities for customization such as discounts and promotions. An automated system can even send quotes directly to prospective customers.

Efficient contract management

An automated order processing system can coordinate easily with your shopping portal, eliminating time-consuming scheduling processes and ensuring that your order fulfillment aligns with your current inventory.

Error-free invoicing

Automating the invoicing process significantly reduces the risk of avoidable human errors that can slow down order fulfillment and lead to delayed or incorrect payments. When errors do occur, the greater visibility provided by an automated system makes it far easier to pinpoint and correct the issue.

Deeper data insights

The data analytics generated by the Q2C process play a pivotal role in projecting budget forecasts and predicting cash flow for the immediate future. An automated system can generate regular reports that provide deeper insights into what works best about your process and which areas have room for improvement, leading to a more efficient and cost effective process across the board.

Futureproof your Business! Discover the 5 Trends AP Leaders Must Know for 2023

How Can MHC Solutions Enhance Your Q2C Process?

As you can see, the benefits of automating your quote-to-cash process with a reliable software solution are difficult to ignore. Ready to find out more about the ways an automated software solution from MHC can improve your quote-to-cash process and boost your bottom line? Contact us today to arrange a free demonstration!

Related Terms

Want to learn more about Accounts Payable? Here are some related terms that you might be interested in. Explore our AP glossary further!

Find out what Invoice data capture is, what the challenges of manual invoice data capture are, and what benefits your company gains by adopting an automated data capture system.

Find out more >

Learn about the O2C (Order-to-Cash) cycle, the challenges of using a manual O2C process, and the benefits of automating O2C!

Find out more >

Find out all about remote invoice approval – what it is, what the process looks like, and the benefits your company reaps by using an invoice automation solution.

Find out more >

Accounts Payable

Step into the exciting world of accounts payable with MHC! Explore our in-depth glossary of some key terms related to AP processes, roles, tools, and services.

See now >


Get to Know MHC!

Automate Processes.
Empower People. Reach Your Goals.

From document capture and content creation to employee self-service and other critical use cases across the enterprise, you can combine and configure MHC’s automation solutions to empower teams to meet goals today – and for the long game.

Download our guide and find out how MHC Automation can help you improve service, manage compliance, and drive ROI.


Simplify the processing of invoices and payments while reducing costs, errors, and time-consuming tasks.

See MHC in Action!

Scroll to Top