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Quote to Cash (QTC): A 7-Step Process

Posted by Ethan Hilner
on September 22, 2022

What is quote to cash (QTC)?

Quote to cash refers to the entire process from the initial quote and agreement of cost, to the delivery of the products and services, along with payment for services rendered.

Before entering the quote stage, sales reps have to complete steps such as contacting and recruiting potential clients. Once a prospect is located, a customer request for proposal (RFP) must be created and the official quote to cash procedures begin.

In a non-automated system, different groups or teams are involved throughout the various steps. After gathering customer needs, sales teams create and approve the quotes, account managers handle order fulfillment and customer experience and account management ensures accurate invoices are sent, bills are paid and payments are collected.

All of these roles are essential to the delivery of a product. If you want to ensure your processes are thorough, there should be a post analysis that addresses any issues that may have come to light throughout the process every time it is completed.

Quote to Cash Automation

As technology advances rapidly, the potential for automation grows. Typical automation solutions such as ERP (Enterprise Resource Planning) include redundant, recurring, or manual operations that require considerable manual work. However, with Hubspot Payments we make the process easy, efficient and you are not locked into the same model if you want to make changes.

Typically a manufacturing company runs its entire accounts receivable model off of net30 invoices. This means once someone signs a contract, it is handed off to a finance team. There tends to be a lot of back and forth between them and the client to identify where to send invoices. Then an invoice is created and sent, generally through the mail to the client. It then sits on a desk until the client's finance team runs their vendor processing. When it is finally reviewed there are vendor documents, W-9s and other pieces of information the vendor wants addressed before a payment is made. At this point it has been longer than 30 days and the company is still awaiting payment.

If they were using a B2B ecommerce system like HubSpot Payments, that company could have created quotes, invoices and payments with links attached to any W-9 or other documents requested, completely automated and addressed it at the time of signing the agreement. This means the time from product delivery to case collected goes from over 30 days, to less than 1 day!

Enterprise Resource Planning (ERP)

ERP is a type of software that aims to help organizations manage their business more efficiently. It focuses on streamlining day-to-day activities as well as the process of delivering a product as a whole and receiving payments much like HubSpot Payments. However, in comparison, ERP is expensive and incredibly difficult to set up. To manage an ERP you must have a specialized user and once it is set up it is nearly impossible to change because it is so complex.

HubSpot Payments is set up so you can personally manage all parts of the quote to cash process. With all of the tools available you can increase productivity, efficiency and accuracy without having to rely on complex software that only a specially trained user can understand and utilize.

The 7 Step Quote to Cash Process

Quote to cash encompasses the entire sales cycle of a product including opportunity management, product generation, price quote, contract management, the order fulfillment stage, revenue management and post analysis tasks. Knowing how to set up and maintain a streamlined quote to cash process can make a huge difference in business outcomes and revenue. Streamlined sales processes can support sales teams' success, help them to engage clients more effectively, decrease administrative work and set your company up for success in optimizing sales. Find out how to set up and maintain a fantastic quote to cash program within this 7-step process.

1. Lead Generation

Lead generation, also known as opportunity management, is the process of attracting prospects to your business and increasing their interest through nurturing, with the end goal of converting them into a customer. Some ways to generate leads are through blog posts, events, coupons and related online content.

Once leads are generated and converted into a potential client, a sales team will need to create and provide the prospect with a quote.

2. Configure Price Quote (CPQ)

During this step, a sales team creates a quote proposal using QTC/CPQ software. This normally occurs after or during an initial meeting where the service or product has been discussed. This quote will include the product generation and description, a price quote, followed by an initial contract to be negotiated and agreed upon by both parties.

Because customer needs can differ so much from company to company HubSpot has 4 different tools that will help the rep personalize the quote for the prospect as well as ensure it’s accurate and includes any available discounts. They include:

  • HubSpot Payments

Hubspot Payments is the best QTC tool for digitizing payments, increasing revenue growth and improving the customer experience with built-in payment links created for each individual quote. HubSpot Payments allows you to add the payment link directly into the quote, this allows you to perform a transaction right away once a contract has been agreed upon.

HubSpot is integrated with your Customer Relationship Management (CRM), meaning all information about your prospect is automatically embedded in their profile. Having everything in one place allows for an efficient streamlined experience and reduced the risk of payment bottlenecks. 

  • Chargebee

Chargebee is the best QTC tool for configuring quotes with custom terms within the contract that will automatically turn into subscriptions or a recurring payment once the prospect has accepted. This tool for subscription billing and revenue management and has its own built- in quote to cash tool.

With this tool you can send an email that includes contract terms in your quotes, including the renewal and automatic recurring payment information. Once your customer has accepted the quote, it immediately turns into a subscription and an accurate invoice is automatically passed on to the customer creating an efficient and streamlined experience.

  • DealHub

DealHub is the best QTC tool for creating an automated quote on your own CPQ platform. This tool will allow you to create a custom quote in several different formats i.e. PDF, microsoft word.

This platform makes it easy for sales teams to add discounts to quotes and establish workflows that are automated and will help you effectively manage your quote delivery and approval processes to increase your revenue.

DealHub also makes it easy to update product information, change quote configurations and other aspects as well to ensure your process is as efficient and consistent for your sales team. 

  • QuoteWerks

QuoteWerks is the best tool for creating consistent and accurate quotes for your CPQ and QTC processes that will also let you know when quotes have been received and opened by customers.

QuoteWerks will also allow you to collect deposits and payments immediately once a quote has been accepted by a client. 

There are management and workflows built into the program that will ensure every quote is consistent and accurate across the board. You can also choose to brand your quotes and customize the terms and conditions to meet your needs. 

One of the best parts is that QuoteWerks serves as a centralized quote storage location which allows for a single accessible location. This makes the process much more straightforward and efficient.

3. Proposal Presentation

Once the CPQ process is complete, the sales rep will use the quote derived during step 2 to present the proposal to the prospect. They will cover the requirements of the product to be delivered as well as the cost, within an agreed upon timeframe.

4. Negotiation

At this stage the customer and the sales team will discuss the contract and possibly negotiate it, if needed. Once this step is complete, they can come to an agreement for the final contract. 

5. Final Contract Agreement

Once the contract has been reviewed, negotiated (where necessary) and agreed upon, the sales team can then create the final contract. When it is completed it will automatically be shared with both parties, so the product can be delivered quickly and payment can be received immediately. At this point, order fulfillment will be notified so the product can be delivered within the agreed upon timeframe.

6. Invoice Creation

One of the greatest parts of payment automation is once the contract is agreed upon an accurate invoice is automatically created so that payment can be collected immediately. Because of the effective tools available in the CPQ step, there should be no surprises and the invoice amount will be expected so there will be no delay in payment.

7. Payment and Receipt

Payments are collected during this final step and receipts are generated. A good practice at the end of this step is to review your process to see if there were any issues or areas of improvement you can look into, this is essential for customer relationship management.

The QTC steps are a great guideline to ensure your process is complete and your workflow is solid and will ensure the most success and revenue for your company.

Final Thoughts on Q2C and ERP

Automation is a necessary measure that company's must take if they want to increase their efficiency and revenue as much as possible. In the past ERPs have been the main option to do this and many companies have chosen to avoid it due to its complex nature and expensive costs. Many companies have even regretted getting locked into a system that is difficult to manage and change.

With HubSpot there is another option that is not only user friendly and affordable, but it is incredibly efficient. HubSpot can help streamline processes, increase efficiency and substantially increase profits. Setting up your QTC process is easy compared to ERP softwares and can be changed and modified without hassle to ensure you are providing the best customer experience. 

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