Glossary > Quote-to-Cash (Q2C / QTC)
Quote-to-Cash (Q2C / QTC)
Quote-to-Cash (Q2C / QTC) is a business process that includes the entire sales cycle, from quoting a price to closing a deal and collecting payment. It is used by SaaS companies to manage and streamline the sales process, from customer acquisition to revenue recognition. Q2C helps SaaS companies manage their sales process by providing a single platform to manage quotes, orders, contracts, billing, and payments. The Q2C process is typically managed through a software system that integrates with other business applications, such as CRM, ERP, and billing systems.
The benefits of Q2C for SaaS companies include increased efficiency, improved visibility into the sales process, and reduced errors and delays in billing and revenue recognition. The process also helps ensure compliance with regulatory requirements and reduces the risk of revenue leakage.
The basic steps of the Q2C process include:
- Sales quoting: The sales team prepares a quote for the customer based on their requirements and pricing rules.
- Sales approval: The quote is reviewed and approved by management or an automated approval process.
- Order processing: Once the quote is approved, the order is processed and entered into the system.
- Order fulfillment: The order is fulfilled, and the customer receives the product or service.
- Invoicing: The invoice is generated based on the order details and sent to the customer.
- Payment collection: The customer pays the invoice, and the payment is recorded in the system.
- Revenue recognition: The revenue is recognized in the financial statements based on the revenue recognition rules.
- Renewal: The customer is contacted to renew their subscription or service agreement, and the process starts over again.
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