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How to Streamline Quote to Cash Process

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20223 min read

As a business owner, managing cash flow efficiently is likely up there as one of your top priorities. Profit margins depend on having an optimised and streamlined cash flow system which can ensure the quote to cash process is smooth and hiccup-free.

In this post, we’ll take you through how to finesse your quote to cash process and, as a result, elevate your long-term profitability.

Quote to cash definition

In order to know how to improve the efficiency of the process, we first need to clearly understand the quote to cash definition.

Quote to cash refers to the whole of a sales process, beginning with product/service pricing, quoting, customer reception, purchasing and eventual revenue. There are a number of quote to cash process steps, including discussing with customers what it is they wish to receive a quote for, ensuring that you meet their specifications, and finalising a quote for the client to either approve or reject.

Further quote to cash process steps include negotiating the quote with clients, invoicing the client and receiving payment for the service. It may even require re-orders and further negotiations along the line, especially with repeat customers.

No matter what software solutions you use for this process, it’s an essential function of your business. It’s also something which needs to be optimised, streamlines and frequently re-assessed to ensure it runs as efficiently as possible.

Quote to cash vs order to cash

A question business owners frequently ask is how quote to cash differs from order to cash.

Order to cash begins once a customer has placed an order. It therefore refers to all the steps involved in delivering the product or service to a customer after they have already made a purchase. It involves inventory, practical operations and links to production.

Quote to cash, meanwhile, refers to the whole process spanning from a customer showing interest in a product or service to them receiving their goods and the business receiving their payment.

Quote to cash process

Those unfamiliar with the process may be wondering how to use quote to cash. Now that we’ve discussed what is meant by the term, we can explore how to use quote to cash in practice.

An integral part of the quote to cash process is determining exactly what a customer is seeking and offering the best possible price. At this stage, it’s very important that information regarding the service is made simple to understand so that the customer is able to easily make their decision regarding their purchase.

In order to determine the most appropriate quote, it’s important to dedicate time to understanding precisely what the customer is looking for and having a clear idea of their budget. This ensures that the quote offered both meets the needs of the customer and is affordable for them, while making sure the company receives the correct compensation.

The next step is to be punctual and accurate when delivering a quote to a customer. Quotes which are inaccurate or take too much time to finalise will lead customers to look elsewhere for the services they require. Experience in this area will help you improve efficiency on this front, however, it should be a priority from the get-go in order to carry customers successfully through showing an interest to making a payment.

Quickness and accuracy are also for your benefit as much as the customer’s. After all, the sooner the customer is onboard with the quote, the sooner the cash will appear on your balance.

Streamlining the quote to cash process

Once a customer has accepted a quote, there are further steps which need to be streamlined for the process to run as smoothly as possible. These are outlined below.

Contract management

Once a quote has been accepted, a contract should be drawn up and signed by the customer. Contracts should be clear, easy to understand and thorough. Addendums should be added when needed. It is useful to have a sales representative run through the contract with a customer to ensure they understand completely.

Fulfilment

Once the contract is signed, the next step is fulfilment. This is the carrying out of the services or the delivery of the goods agreed upon. Ensure everything is in order for this step to go ahead without a hitch.

Billing

The next step is to bill the client promptly and accurately. Avoiding errors and delivering bills in a timely manner will help speed up payment.

Collection

Finally, the funds will be collected from the customer. In the instance that payment is late, a business should contact the client to gently remind them of their due payment. Good customer service and providing easy payment solutions can help ensure payments are made on time.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.