Quote-to-Cash Cycle
Manufacturing quote-to-cash cycles average 90+ days, with 15-25% of deals stalling at each stage. Most companies can't identify WHERE deals are stuck until it's too late. The result: unpredictable cash flow, bloated inventory, and sales teams chasing the wrong opportunities.
💡TL;DR
Quote-to-Cash (Q2C) measures the entire revenue cycle from first quote to money in the bank. For manufacturers, this is typically 60-180 days across 6-8 stages. Problems compound: a 10% delay at each of 6 stages = 77% longer total cycle. Key optimization points: (1) Quote-to-order conversion (where deals die), (2) Order-to-shipment (where production delays hit), (3) Invoice-to-payment (where cash gets stuck). Track stage-by-stage velocity, not just total cycle time.
Definition
The complete business process from initial quote creation through final payment collection. In manufacturing, this cycle is often 60-180 days and involves multiple handoffs: quoting → negotiation → order entry → production → shipping → invoicing → collection. Each stage represents potential revenue leakage.
🏢What This Means for SMB Teams
SMB manufacturers often have no visibility into their Q2C cycle—quotes go out, orders eventually come in, but the middle is a black box. This makes forecasting impossible and creates cash crunches when multiple large orders hit production simultaneously. Stage-by-stage tracking transforms reactive firefighting into proactive management.
Long sales cycles? Auto-nurture 90-180 day deals, never lose touch.
Patience + persistence, automated for manufacturing.
📋Practical Example
A 60-person precision machining company had a "90-day average" Q2C cycle but couldn't explain why some deals closed in 45 days while others took 180+. After implementing stage tracking (Quote Sent → Customer Review → Technical Approval → Commercial Approval → PO Received → Production → Ship → Invoice → Paid), they discovered: 40% of cycle time was in "Customer Review" with zero follow-up happening. Adding automated 7-day and 14-day follow-ups reduced average cycle to 62 days and improved cash flow by $400K/quarter.
🔧Implementation Steps
- 1
Define your stages: map every step from quote creation to cash receipt. Typical: Quote → Review → Approval → PO → Production → Ship → Invoice → Collection.
- 2
Instrument timestamps: record when each deal enters and exits each stage. Even spreadsheet tracking beats no tracking.
- 3
Calculate stage velocity: average days in each stage, conversion rate between stages. Identify the biggest bottlenecks.
- 4
Set stage SLAs: maximum days a deal should stay in each stage before escalation or follow-up action.
- 5
Automate stall detection: when a deal exceeds stage SLA, trigger alert to owner plus automated follow-up sequence.
❓Frequently Asked Questions
What's a good quote-to-cash cycle time for manufacturing?
Varies by product complexity. Standard products: 30-45 days. Configured products: 60-90 days. Engineered-to-order: 90-180 days. More important than absolute time is consistency and predictability. A reliable 90-day cycle enables better planning than an unpredictable 60-120 day range.
Where do most manufacturing deals get stuck?
Three common stall points: (1) Customer technical review—specs need clarification, gets deprioritized internally. (2) Commercial approval—stuck in procurement queue or budget cycle. (3) Post-shipment invoicing—AR doesn't follow up on overdue payments. Each requires different intervention: technical needs proactive spec resolution, commercial needs stakeholder mapping, AR needs automated collection sequences.
⚡How Optifai Uses This
Optifai tracks deals through every Q2C stage with automatic timestamp capture. When a deal stalls beyond its stage SLA, the system triggers follow-up actions: reminder emails to customers, escalation alerts to sales managers, and revival sequences for dormant opportunities. The ROI Ledger attributes revenue acceleration to specific interventions, proving which actions actually shorten cycles.
📚References
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Related Terms
Sales Velocity
A metric measuring how quickly deals move through the pipeline and generate revenue, calculated as: (Number of Opportunities × Win Rate × Average Deal Size) / Sales Cycle Length.
Pipeline Management
The process of tracking and managing sales opportunities as they move through stages, including forecasting, prioritization, and identifying at-risk deals.
RFQ Turnaround Time
The elapsed time between receiving a Request for Quote (RFQ) from a prospect and delivering a complete quotation. In manufacturing and industrial sales, RFQ turnaround time is a critical competitive differentiator—faster quotes often win deals regardless of price.
Pipeline Coverage
The ratio of total pipeline value to sales quota, indicating whether there are enough opportunities to meet revenue targets given historical conversion rates.