One of the most important business processes, quote-to-cash is often abbreviated as Q2C or QTC and is associated with driving revenue for the organization. It is the end-to-end sales process that begins with configuration and pricing of the product and is followed by quoting, customer acceptance, placement of the order and finally managing revenue. QTC is typically preceded by branding and marketing.
The QTC process is often confused with the O2C or order-to-cash process. OTC is essentially a subset of the QTC process. The OTC process is basically an organization’s order management system that plays a vital role in establishing and maintaining a robust relationship between the organization and its customers. OTC starts with the placement of the order by the customer and goes on until the order is fulfilled and paid for by the customer.
It largely deals with how an organization can optimize order delivery. On the other hand, quote-to-cash is a more comprehensive process that encompasses not only the OTC process, but also other critical processes such as configuration of price quote, revenue management, contract management and so on.
The QTC process entails a number of different functions such as sales management, account management, billing, order fulfillment, maintaining account receivables and more. The process starts with the sales team creating a quote and drafting a proposal for the client all the way to when the services are rendered and the payment is received.
Now that we know what QTC means, let’s talk about the various steps in the process and what goes into each one of them:
Another way to look at the quote-to-cash process is by dividing it into three layers, or levels, each of which encompasses a set of steps. Let’s see what goes into each of these layers and find out why each is important.
The first level of QTC combines the activities of the first three steps in the process. CPQ is primarily a set of steps that encompasses the configuration, pricing and quoting processes, and helps teams optimize their sales proposals to ensure high-touch sales. CPQ comes in handy for creating sales packages, product customizations and customized offers and discounts. As opposed to performing CPQ manually, automating the phase can help create on-brand, error-free quotes quickly.
The second level involves the contract creation/negotiation and the contract execution steps. During this phase, the customer is presented with a formal contract, which the customer can then negotiate or accept as is. Once the contract has been finalized, the agreement is signed and the terms executed. While in some cases, the contract gets finalized quickly, at other times, this phase might take longer, with multiple negotiations making the sales process complex.
The last level of QTC, revenue management encompasses the last three steps in the process. This phase is designed to ensure accurate and efficient management of processes related to revenue such as billing, revenue recognition, order management and so on. Revenue management is a critical level that focuses on building trust-based relationships with customers and ensuring that the business leverages revenue opportunities like renewals that might be otherwise overlooked.
Let’s now discuss some of the common challenges associated with QTC that you must be aware of:
Often, we forget that sending an invoice to a customer is another touchpoint, and if the invoice is inaccurate, not only does it hurt your trust with your customer, it also often means that you are eating up that mistake in your cash flow.
Ensure that you are automating the ability to correctly count users, devices and cloud services that you have serviced for.
Another challenge is that many businesses maintain an Excel spreadsheet of all products quoted, which can lead to a not up-to-date list of pricing and can lead to a quote with errors. Leverage integrations with distributors in your PSA to automatically pull in pricing and product descriptions to make quoting easy.
How do you make sure that your QTC process is effective and beneficial for your business? Here’s a list of best practices that will help you improve the QTC process:
Deploy a robust professional services automation (PSA) tool to optimize, standardize and streamline the QTC process.
Leverage automation to make sure that critical processes, such as quoting and billing, can be performed error-free and in a timely manner.
Make sure that your quoting process is up to date with the latest invoice schedules, payment terms and more to minimize the back and forth that the finance and delivery teams might have to face in order to make the changes.
Kaseya BMS is a comprehensive next-gen PSA solution that offers a modern and intuitive platform for businesses to perform critical QTC functions, such as the ability to pull in live pricing and product descriptions from Ingram Micro, Etilize, and Techdata to streamline quoting, and the ability to automate end-to-end billing from user, device and cloud-services reconciliation to sending out the invoice.
With its end-to-end billing automation, BMS eliminates human error and ensures that you can create a seamless, error-free experience from the very first to the very last interaction with your customers, every single time. Want to know how you can streamline your QTC process with Kaseya BMS? Request a demo today!
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