It can be tricky to pin down a definition of Quote-to-Cash (Q2C), let alone an understanding of what it means to achieve Q2C success. This research note contextualizes quote-to-cash within the scope of the broader agile monetization ecosystem, defines what Q2C excellence looks like, and outlines practical steps to achieve success. It also explores the friction in quote-to-cash and why Q2C remains a challenge for many businesses today.

What Is Quote-to-Cash?

an image of office executives discussing data overlaid by q2c icons

MGI Research defines Quote-to-Cash as a critical capability that unifies company sales performance and quoting efficiency and efficacy with the ability to accurately process orders, provision services, meet commitments and service levels, bill clients, collect cash, and generate accurate and timely reporting.

There are several variations on the Q2C theme, including Order-to-Cash, Order-to-Revenue, Opportunity-to-Cash, Lead-to-Revenue, and Quote-to-Revenue. Most are similar in their intent but vary in terms of the inclusion or exclusion of the revenue management process beyond actual cash collection.

Despite its long tenure, Q2C lacks distinction. Some organizations see it as a process that acts simply as a bridge from the front-office to the back-office. More progressive organizations increasingly look at Q2C as a core capability to be measured and continuously improved – with higher customer satisfaction and stronger financial results as the reward for improvements.

MGI views Q2C as a capability comprised of many processes. We position Q2C as a subset of the Agile Monetization Platform (AMP) reference model. Specifically, Q2C spans sales and revenue operations from prospecting all the way through revenue recording, reporting, and disclosure.

Q2C success often manifests itself through sales acceleration, improved cash collections, greater customer retention, and declining or nonexistent revenue leakage. Failure in Q2C takes on many forms and its impact can be far-reaching. A fiasco in Quote-to-Cash has direct bearing on the company’s competitive position, market share, growth, margins, customer satisfaction, and, ultimately, its valuation. Quote-to-Cash performance can affect cost of customer acquisition, subscriber churn, and financial performance.

How Has Q2C Success Evolved Over Time?

The term Quote-to-Cash evolved in the 1980s and reflected the batch nature of data processing at the time. Automation activities were performed serially, with large files being passed from step to step. Quotes were not typically handled in any  kind of a mechanized fashion but were rather delivered to customers on paper with some input from custom spreadsheet models. Pricing of quotes and  configuration of components was largely done manually, and typically relied on organizational memory and best practices rather than on automated tools with consistent data. Upon quote acceptance by a prospect, sales would communicate transaction parameters to finance, an invoice would be added manually to the next billing cycle, and finance would monitor the conversion of the invoices into collected cash.

Success meant running things on time with as few outages as possible. Both sales and finance teams had limited visibility into the process – let alone any sense of control. In fact, most people (other than a few IT professionals) did not even know what Quote-to-Cash was. Eventually, companies selling sophisticated products (e.g., computer servers, aircraft components, and industrial machinery) began to introduce product configurators to reduce errors and alleviate complexity. These tools were the precursors to modern Q2C tools.

The Q2C concept endured well into modern times. It has often been used as a catch-all term, although its perimeters and definition have changed radically – as has the definition of success. (See “Quote-to-Cash is Dead, Long Live Prospect to-Disclosure.”)


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