Quote to Cash

Make quoting, procurement, and payment more efficient with a modern QTC process.

Abby Humphries
Author: Abby Humphries
December 18, 2024
Read Time: 5 mins

What is Quote-to-Cash? 

Quote-to-Cash (QTC) is the entire process that starts when you build a quote and ends when cash hits your bank account. The QTC process is the framework for selling, fulfilling, and securing payment, encompassing every step from discovery, quote configuration, proposal creation and contract management to order procurement, implementation, invoicing, and revenue recognition. 

QTC is also referred to as your revenue operations. It involves several teams including sales, operations, engineering, and accounting.  

VARs and MSPs that sell technology solutions (products and services) face unique challenges that make QTC more complex than in traditional product only sales.  

An optimized Quote-to-Cash process is about giving your team the tools to close deals faster, streamline fulfillment, and make receiving payment frictionless. For MSPs looking to scale, mastering QTC is essential to unlocking growth and staying competitive. 

Current Trends in Quote-to-Cash 

According to research from the Aberdeen Group, modern QTC solutions deliver tangible results, including:

  • 49% boost in proposal volume
  • Sales cycles cut by over 25%
  • Improved conversion rates by 17%
  • Deals that are 105% larger. 

MSPs are redefining their Quote-to-Cash processes to stay competitive. Here’s what’s shaping the landscape: 

  1. Automation: Automation tools are becoming essential for MSPs, particularly in areas like quoting and proposal creation. These tools help reduce errors and accelerate output while accommodating diverse customer needs, such as providing automatically generating a bill of materials or integrating with CRM and PSA systems. According to research by McKinsey & Company, successful businesses are leveraging automation effectively, with nearly 90% of their invoices issued digitally. 
  2. Platform-Based Services: MSPs are shifting toward integrated platforms that connect all QTC components, reducing silos and enhancing the customer experience. 
  3. Customer-Centric Digital Experiences: MSPs are prioritizing user-friendly client portals for quote approvals, real-time order tracking, and transparent billing to boost satisfaction and retention. A survey by Forrester found that 77% of B2B marketing decision-makers agree that buyers and customers expect an immediate response to their questions. 
  4. API-Driven Ecosystems: API-first platforms enable better integration between point solutions, allowing MSPs to simplify their tech stack, enhance collaboration, and respond more dynamically to market needs. 

The Benefits of Implementing a Modern Quote-to-Cash Strategy 

Modern Quote-to-Cash (QTC) is a unified process that digitally connects your entire revenue operations eliminating inefficiencies and manual back-and-forths. It simplifies the journey from quoting to getting paid. 

Improved Revenue Predictability 

With a streamlined Quote-to-Cash process, MSPs can accurately forecast revenue by tracking every step, from quote generation to payment collection. This level of visibility helps you manage cash flow more effectively and plan for growth. 

Faster Sales Cycles 

Automated tools reduce manual steps like quote creation, contract approvals, order procurement, and invoicing, allowing deals to close faster. The quicker you move from closing the deal to getting paid, the sooner your MSP can innovate and grow organically. 

Enhanced Customer Experience 

A seamless QTC process eliminates confusion and delays for customers. Features like digital sales rooms, client portals, real-time quote and order tracking, transparent billing, and timely delivery contribute to stronger relationships and higher retention rates. 

Operational Efficiency 

By integrating and automating QTC workflows, MSPs reduce manual errors and minimize administrative overhead. This frees up resources to focus on strategic initiatives rather than managing disconnected tools and labor-intensive tasks. 

Stronger Profit Margins 

QTC systems often come with advanced analytics to monitor performance and identify inefficiencies. This allows you to optimize pricing, improve service delivery, and maximize profitability. 

Regulatory Compliance and Reporting 

Modern QTC tools help MSPs stay compliant with industry regulations by providing detailed documentation and audit trails. Accurate reporting simplifies tax preparation and ensures adherence to standards. 

How Quote-to-Cash Impacts Revenue Recognition 

Quote-to-Cash plays a critical role in revenue recognition by creating a clear and consistent process for managing sales transactions. With QTC, revenue is tracked from the initial quote to final payment, ensuring accurate financial records at every step. 

Integrating systems like CPQ, procurement, and accounting into the QTC process helps minimize errors and discrepancies that often delay revenue recognition. It ensures that contracts, billing, and payments align with compliance standards, giving businesses confidence in their financial reporting. 

This approach improves accuracy and speeds up the recognition process.  

For subscription-based models, a well-defined QTC process based around subscription management helps you stay on top of renewals and avoid revenue leakage. Ultimately, the goal is to ensure that revenue is recognized correctly and on time, supporting better financial planning and growth. 

Benefits of Quote-to-Cash for MSP Sales Teams 

For MSP sales teams, an efficient Quote-to-Cash process removes roadblocks and creates a smoother, faster path to closing deals. By automating key steps like quote generation and contract approval, you can reduce delays and keep the focus on customer experience. 

Modern CPQ software allows MSP sales teams to provide customers with accurate, tailored quotes in minutes, not days. This speed and precision build trust and help move opportunities through the pipeline more efficiently. 

You can also create better collaboration between teams, ensuring everyone from sales to operations stays aligned. This increases productivity by eliminating silos and long-response times. 

Additionally, QTC tools offer valuable insights into sales performance, helping teams identify trends and optimize their strategies. From faster deal cycles to improved forecasting, an efficient QTC process empowers MSP sales teams to close more deals and hit their targets with confidence. 

How to Improve the Quote-to-Cash Process 

Improving the Quote-to-Cash process starts with identifying bottlenecks and streamlining workflows. Here are practical steps to take: 

  • Integrate Your Systems: Connect your CPQ with your CRM, ERP, PSA, ITSM, and other essential tools. This ensures seamless communication between departments, reduces data silos, and makes adding automation easier.
  • Automate Repetitive Tasks: Pricing approvals, handoffs between teams, bill of materials, critical deal and quote information are just a short list of tasks that should be automated to reduce errors, save time and speed up the sales cycle.
  • Standardize Processes: Create templates for quotes, proposals, and contracts to ensure consistency and reduce delays caused by manual edits.
  • Enable Real-Time Visibility: Use dashboards and reporting tools to track the progress of quotes, approvals, and payments. Real-time data helps teams stay proactive and resolve issues quickly.
  • Focus on Customer Experience: Simplify the process for customers by offering a digital experience. Offline tools like PDFs and emails are difficult to manage and don’t align with how your customers want to purchase. You should be providing things like real-time shipping for orders, online payments, support tickets, ordering both new and renewals, performance tracking, and real-time messaging.
  • Train Your Team: Ensure that sales, operations, engineering, and accounting teams understand the QTC process and their roles within it. Document your workflows and map out the tools and roles associated with each step. Clear communication and alignment are key to success. 

How to Streamline Quote-to-Cash with Technology 

Choosing the right technology is crucial for MSPs to create a modern and efficient Quote-to-Cash process. Purpose-built solutions designed specifically for MSPs are key to achieving seamless operations and driving long-term success. 

Here’s what to look for: 

  • Adopt Platform-Based Solutions: Use QTC platforms that cater to MSP workflows, integrating CPQ, contract management, order fulfillment, and invoicing in one place. Platform-based tools ensure every step is connected, reducing friction and improving efficiency.
  • Leverage AI and Analytics: Predictive analytics optimize pricing and help identify bottlenecks, while AI can streamline approvals and improve decision-making across teams.
  • Ensure Cloud-Based Collaboration: Cloud platforms enable real-time collaboration, keeping sales and operations aligned. This ensures everyone is working with the latest updates and reduces miscommunication.
  • Prioritize Seamless Integrations: Choose tools that have native integrations with your critical apps and partners such as distributors, OEMs, banks, CRMs, ERPs, PSAs, ITSMs and accounting ystems to create a connected ecosystem that supports end-to-end operations.
  • Focus on Usability: Tools with user-friendly interfaces make adoption easier for teams and reduce training time. Simplicity ensures teams can focus on value-added tasks instead of navigating complex systems. 

Quote-to-Cash vs. Configure, Price, Quote 

While Quote-to-Cash (QTC) and Configure, Price, Quote (CPQ) are related, they serve distinct purposes. 

  • Scope: CPQ focuses on configuring products, setting prices, and generating quotes and proposals. QTC covers the entire process from quoting to payment.
  • Integration: QTC integrates with other business functions like legal, finance, and operations. CPQ is typically limited to the sales function.
  • Customer Journey: CPQ improves the front-end experience by making quoting faster and more accurate. QTC ensures the entire transaction, including procurement, implementation, billing and revenue recognition, is seamless. 

In short, CPQ is a crucial component of the QTC process but doesn’t address the full lifecycle.  

Frequently Asked Questions

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

Order-to-cash focuses on processing orders after they are received, whereas quote-to-cash covers the entire lifecycle from generating quotes to receiving payment. Quote-to-cash includes pricing, contracts, and the quoting process, making it a more comprehensive approach.

What is a quote-to-cash position?

A quote-to-cash position involves managing the entire QTC workflow. This role may include overseeing quoting, order processing, contract management, billing, and revenue recognition to ensure seamless operations.

Is CPQ quote-to-cash?

No, CPQ is a part of the Quote-to-Cash process. While CPQ focuses on the front-end tasks like product configuration and quote creation, quote-to-cash encompasses the entire process from quotes to payments and revenue recognition.

What does the quote-to-cash cycle cover?

The Quote-to-Cash cycle covers all steps from creating a customer quote to receiving payment. It includes quoting, pricing, contract management, order fulfillment, invoicing, and revenue recognition.

What is quote to revenue?

Quote to revenue refers to the streamlined process of managing a customer’s journey from the initial quote to recognizing revenue. It ensures every step—quoting, contracting, billing, and payment—is efficient and compliant.

What are the 3 layers of quote-to-cash? 

The 3 layers of Quote-to-Cash include: Quoting and Pricing: Creating accurate quotes with dynamic pricing models. Contract and Order Management: Ensuring smooth approvals, contract generation, and order processing. Billing and Revenue Recognition: Handling invoicing, payments, and recognizing revenue according to compliance standards.