Revenue Operations Glossary
Clear, plain-English definitions of the accounts receivable, billing, and revenue operations terms that shape the contract-to-cash lifecycle.
Days Sales Outstanding (DSO)
Days Sales Outstanding (DSO) is the average number of days a company takes to collect payment after a credit sale is made. It is the most widely used accounts receivable efficiency metric, expressed as a single number of days. A lower DSO means customers pay quickly and cash converts fast; a higher DSO means cash is tied up in unpaid invoices and working capital is under pressure.
Cash Application
Cash application is the accounts receivable process of matching incoming customer payments to the specific open invoices and customer accounts they were meant to pay. Once a payment is matched and recorded, the corresponding invoice is marked as paid and the receivable is cleared from the books. It is the final step that turns a payment into recognized, reconciled cash.
Quote-to-Cash (QTC)
Quote-to-Cash (QTC) is the end-to-end revenue process that spans everything from generating a price quote for a prospect to collecting and recognizing the resulting payment. It is the broadest of the common "to-cash" processes because it begins before the deal is closed — at the quoting and configuration stage — and continues all the way through invoicing, payment, and revenue recognition.
Order-to-Cash (OTC)
Order-to-Cash (O2C, sometimes OTC) is the end-to-end business process that begins when a customer order is received and ends when the resulting payment is collected and reconciled. Unlike quote-to-cash, it does not include the pre-sale quoting and negotiation stages — the order is the starting point, so O2C is the natural frame for businesses that sell against purchase orders rather than custom-quoted deals.
Revenue Leakage
Revenue leakage is earned revenue that a company is entitled to but never actually collects, lost through gaps in its billing, contract, and collections processes. It is distinct from a sales miss or a discount: the revenue was already won under a signed agreement, but operational breakdowns mean it is under-billed, never invoiced, or never collected. Because it hides inside normal operations, leakage usually goes unnoticed until someone reconciles contracts against what was actually billed and paid.