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How Quote-to-Cash Workflows are Evolving

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Before I started building my start-up, I led product for pricing, billing, and revenue data infrastructure for payments platform at JP Morgan for four years. This platform supported 2 billion USD worth of transactions annually, generating well over 25 million USD in revenue each year. I worked closely with Fortune 500 companies, GTM teams, and finance teams to deliver seamless customer experiences.

However, I discovered significant revenue leaks caused by broken revenue infrastructure, particularly in the context of our consumption-based revenue model. To dig deeper, I spent time with 80+ revenue leaders across different enterprise software companies to learn more about their workflows with similar revenue models. Here's what I learned about the challenges at each stage of the revenue lifecycle and how the future of Quote-to-Cash workflows might evolve.

Qualifying and Closing a Customer

  • Just closing is not enough: The traditional role of account executives (AEs) is changing. Traditionally, account executives focused on closing deals, handing off customers to account managers or customer success (CS) teams after procurement was complete. Today, their role extends far beyond signing contracts.

  • Customer Success starts on Day 1: With AEs working to ensure not only customer onboarding but also early adoption and usage. This shift aligns with the broader trend of tying revenue to product consumption, where the initial engagement sets the foundation for long-term success.

Creating and Managing Quotes

  • Discounting: Closing deals using massive discounts is no longer a reliable strategy. AEs must understand unit economics to ensure long-term profitability.
  • Longer Quoting Cycles: Generating quotes requires input from data science, product, and RevOps teams to estimate customer usage accurately. This collaboration leads to longer quoting cycles with frequent back-and-forths.
  • Lack of Customer Confidence: Customers lack confidence in quotes based on estimated usage. They worry about underutilization or overages, leading to strained relationships.
  • Siloed Product Setup: Configurations agreed upon during quoting often fail to translate into accurate product setups, leading to revenue leaks.
  • Challenges with Existing Tools: Existing CPQ tools like Salesforce or Conga struggle with consumption-based models. These tools require extensive manual configuration and training, creating inefficiencies and revenue leaks. Moreover, these software require additional tools to manage the end to end revenue lifecycle.

Billing and Invoicing

  • No GTM Enablement: Billing platforms like Metronome, Stripe UBP, and Orb are starting to mature and address challenges for engineering teams. However GTM teams (sales, customer success, finance, marketing) lack tools to operationalize consumption-based revenue model effectively.

  • Lack of Predictive Insights: These teams struggle to track customer usage trends, identify revenue opportunities, or act on insights quickly.

Revenue Recognition and Accounting

  • Complex Revenue Models: Consumption-based models introduce variability in revenue recognition, complicating compliance with accounting standards like ASC 606 or IFRS 15. Companies struggle to track deferred and accrued revenue accurately across fluctuating usage patterns.

  • Fragmented Tools: Finance teams often rely on manual processes or siloed tools, leading to delays in closing books and risk of errors. Integrations between billing and accounting systems are rarely seamless, creating operational bottlenecks.

Customer Success: Growth and Usage Tracking

  • Limited Tooling: CS teams rely on Looker or Tableau dashboards to track customer health and usage. Insights are inconsistent and heavily dependent on individual reps' interpretations.
  • No Playbook Standardization: Large CS teams struggle to standardize playbooks, making it difficult to scale effective practices.
  • Revenue Leaks: Revenue leaders face churn and stagnation due to poor visibility into expansion opportunities or at-risk accounts. The lack of proactive usage tracking and alerts leads to missed opportunities and preventable churn.

Sales Commissioning

  • Evolving Models: Consumption-based revenue ties sales commissions to customer usage, requiring innovative compensation structures. Companies face challenges in incentivizing reps to prioritize adoption and consumption after deal closure.

  • Ongoing Experimentation: Leaders are testing hybrid models, combining upfront payments with performance bonuses tied to usage growth.

What Revenue and Finance Leaders are Thinking About?

  • Tool Consolidation: "How do we stop using 20 disconnected tools for our Quote-to-Cash workflows?"
  • Strategic Enablement: "How do we enable GTM teams to focus on strategic work instead of struggling with tools?"
  • Agility: "How do we empower teams to move faster, close deals quicker, and operate independently?"
  • Visibility: "How do we gain better visibility across the entire revenue lifecycle to drive better decisions?"

The Future of Quote-to-Cash

As companies adopt consumption-based revenue models, the Quote-to-Cash lifecycle must evolve to address modern challenges:

  • Unified Tools: Streamline workflows and improve collaboration
  • Proactive Insights: Enable AEs and CS teams to drive adoption and prevent churn
  • Smart Systems: Implement AI-driven systems to improve forecasting, usage tracking, and deal management

The companies that embrace this evolution will not only reduce revenue leaks but also empower their teams to deliver better customer experiences and drive growth.

Reach out if you are seeing similar issues at your company, I'd love to chat with you and learn more!