Quote to cash, step by step
The seven steps from proposal to recognized revenue, what usually breaks between them, and what to measure.
Quote to cash is everything between “here’s our proposal” and revenue in the books. Done well, the terms are written once and carried through every step. Done badly, they are retyped five times, and every copy drifts a little further from what the customer agreed.
The seven steps
| Step | What happens | What usually breaks |
|---|---|---|
| Quote | Price the deal: plans, usage, discounts, trials, setup fees. | Prices from an outdated sheet; discounts nobody approved. |
| Approve | The right people agree to the terms before the customer sees them. | Approvals in a chat; edits made after approval. |
| Sign | The customer accepts the terms. | The version signed isn’t the one approved; nobody knows who is waiting. |
| Onboard | The handoff to delivery, compliance checks and setup. | A start date promised before anyone checked what was required. |
| Invoice | Bill each period from the accepted terms. | Billing set up by hand from a PDF; usage priced in a spreadsheet. |
| Collect | Reminders, payments and reconciliation. | Reminders to customers who have paid; payments nobody can match. |
| Recognize | Revenue over the service period, closed and reported. | Figures that can’t be traced back to an agreement. |
The thread: the accepted terms
The most useful habit is to keep one version of the terms, the one the customer accepted, and have every later step read from it. Then invoices can’t drift from the contract, a discount can’t be forgotten at renewal, and anyone can follow a figure back to the signature behind it.
That means the quote and the agreement share their pricing, the agreement is fixed once it is signed, billing is set up from the signed terms rather than retyped, and a later change to your price list doesn’t rewrite what an existing customer agreed.
Where the handoffs fail
- Sales to finance. The signed PDF is emailed to finance, who set up billing from it by hand. Check: can billing be set up without retyping a single price?
- Sales to operations. A launch date is promised before anyone knows what onboarding needs. Check: does every new customer arrive with an owner and a list of what is required?
- Billing to collections. Reminders go to customers who paid yesterday. Check: are reminders sent from confirmed payment status, not a spreadsheet?
- Collections to the books. Payments land in the bank but not against invoices. Check: is each payment recorded against the invoice it settles?
What to measure
- Days from quote sent to signed.
- Days from signed to the first invoice.
- Days sales outstanding: what customers owe, against what you bill.
- Invoices disputed, as a share of invoices sent.
- Revenue you can trace to a signed agreement. The aim is all of it.