Guide
What is contract-to-cash?
Contract-to-cash is the process that turns a signed customer contract into collected payment: reading the commercial terms, scheduling what falls due, invoicing, matching payments, and handling reminders and corrections.
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Which steps does contract-to-cash cover?
- Capture: the signed contract and its amendments are the source of every billing term.
- Interpret: fees, dates, cadence, payment terms, price increases, minimums and caps are read from the contract and approved.
- Schedule: the approved terms become a billing calendar.
- Invoice: every charge that falls due becomes an invoice — checked, approved, sent.
- Collect: payments are matched to invoices; overdue invoices get reminders.
- Correct: changes and errors are handled with linked corrections, never by editing an issued invoice.
How is contract-to-cash different from quote-to-cash and order-to-cash?
| Process | Starts at | Typical for |
|---|---|---|
| Quote-to-cash | A quote from a price list | Software and product sales |
| Order-to-cash | A customer order | Trade and manufacturing |
| Contract-to-cash | A negotiated contract | Agencies and professional services |
Quote-to-cash starts at a quote from a price list and suits companies that sell products, often with CPQ software. Order-to-cash starts at a customer order and suits trade and manufacturing.
Contract-to-cash starts at a negotiated contract whose terms differ from client to client. That is the normal case for agencies and professional services, where a retainer, a milestone plan and a media fee can sit in one agreement.
Where do agencies lose revenue between contract and cash?
- An agreed price increase never reaches the invoice.
- A milestone the client accepted is never invoiced.
- Hours beyond the prepaid budget are never billed.
- A minimum fee is not applied in a quiet month.
- Extra work is ordered as a call-off but billed at the wrong rates, or not at all.
- An invoice is rejected for a missing purchase-order number and never re-issued.
Each of these happens when the contract sits in a folder as a PDF, the billing lives in a spreadsheet, and nobody compares the two.
What does contract-to-cash software do?
It keeps the link between every invoice line and the clause that justifies it, so the finance team can see why an amount is billed and what is still missing.
Valtor does this for agencies in Germany: it reads the contract, a person approves the reading, code calculates the calendar, and every invoice is approved and sent by a person.
Questions and answers
Is contract-to-cash the same as accounts receivable?
No. Accounts receivable starts once an invoice exists. Contract-to-cash also covers what comes before: reading the contract and deciding what to invoice, and when.
Does contract-to-cash include bookkeeping?
Not in Valtor. Bookkeeping stays in DATEV with your tax advisor. Valtor files each issued invoice there as a document (Beleg) and books nothing itself.