Breadcrumb

What Is the Quote to Cash Process?

Written by

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 editedSep 20212 min read

The quote to cash process refers to all the stages that occur between a customer expressing interest in a product or service and the revenue actually arriving in your account. That is, it takes you from quoting a price all the way through to declaring the revenue in your financial records. Maintaining quote to cash best practices will help you to quickly convert customer interest into revenue, and is therefore essential to keeping a healthy cash flow in your company. Keep reading to find out more about the quote to cash process steps and how you can adjust these to ensure the best performance for your business.

Quote to cash definition

Quote to cash is a broad term that essentially covers the entire sales process, beginning with a customer engaging with your product and ending with receipt of payment. This can be broken down into a number of different stages, which include negotiating a quote with the client, drawing up contracts, billing and even analysing the transaction after it has been completed.

Quote to cash process steps

The quote to cash process is separated into a number of different stages:

Product selection and configuration. Once the client has expressed an interest, the company should work together with them to find the best product or service. This involves consultation with the client to identify their specific needs, and can be assisted through automation or even AI insights.
Once the specific product or service has been chosen, a quote needs to be created. One of the most difficult parts of this stage is pricing, which should be done with consideration of both the customer relationship (through offering discounts and promotions) and the company’s revenue. Again, you can use automation to calculate appropriate prices.
The next stage is drawing up a contract, which will detail the company’s obligation to the client and the price agreed upon in the quote.
Following this, the next stage is billing, which involves collecting payment from the customer. The accounting team should send out invoices, and the money owed can be collected.
After payment has been received, this should be recorded in your financial records.

Quote to cash best practices

It’s one thing to understand the quote to cash definition, but how can you maximise its efficiency? There are a number of steps you can take to ensure that you quickly convert interest into revenue.

Firstly, maintaining good invoicing practices will help you to collect payments quickly. Offer a variety of different payment methods for your customers’ convenience, and set clear payment terms and due dates. It’s important to send out invoices as soon as the product or service is delivered to create a good cash flow.

Quote to cash automation is a key method to making your processes easier to run and more efficient. Software can make each stage of quote to cash much simpler:

A Customer Relationship Management (CRM) System will help you to keep track of your customers. For example, this includes up-to-date contact information and details of past orders, allowing you to suggest appropriate products and services to them.
For quoting, a Configure Price Quote (CPQ) solution can speed up the process. Either you or the customer can enter the product specifications into a website or program that will automatically calculate how much this would cost to manufacture and create an appropriate quote based on this.
A final software solution is Enterprise Resource Planning (ERP), which is a way of recording your inventory in real time. This provides all departments of the business with up-to-date data so that you can inform customers of stock, decide how many products may need to be manufactured and therefore make estimates of the duration of the transaction.

Essentially, creating an efficient process is best achieved by making payment simple for your customer and through the use of quote to cash automation. By following these steps, you can maintain healthy cash flow for your business.

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.