A 2012 study by Capgemini found that streamlining the quote to cash process was responsible for a 35 percent reduction in wrong or duplicate orders, and a 15 percent increase in sale volume for reps. The exact steps and their breakdowns will differ from company to company, but implementing processes and procedures to guide your team can have an immediate effect on revenue.
ALSO READ: CPQ Software: Top 6 Solutions and a Case Study
Various experts who deal with the quote to cash process suggest building out a flowchart that details each step in your company’s pipeline to help your team visualize the steps required to move from one stage of the process to another.
Let’s take a closer look.
Modern companies deal with far greater price complexities than ever before. Credit policies, bulk discounts, and early payment terms all affect the consumer, while the back office deals with changing profit margins due to global trade.
To stay relevant, companies must combine all of these factors and keep their prices competitive. Automated tools and pricing catalogs that build models and based on the market and your own pricing structures can help alleviate some of this burden.
While you’re building a pricing structure, you should also set down a few basic policies outlining:
- The minimum time a customer should expect product delivery
- Discounts for net-30 or net-60 payment
- Process for complaints or returns
- Incentive options that don’t compromise profit
Lay out sales and product delivery processes that can act as guidelines for sales and service reps to build their quotes, then publish these policies internally and where customers can access them. The right policies will keep everyone in the organization on the same page and give customer-facing agents a document to reference in the case of customer complaints.
Building a quote for the customer makes up the first of two negotiation stages during the quote to cash process. At this point, your salespeople and product experts use their combined knowledge of the marketplace and the customer’s needs to build a mutually beneficial agreement.
Communication at this stage is of utmost importance. Everyone in the process should be on board with the terms, from accounting to customer success and product delivery, whether it’s a shipping and receiving crew at a warehouse or a software development team. Many companies find their process breaks down here: sales teams over-promise and product delivery teams take a more liberal view of timelines.
Open communication with all stakeholders can streamline the quote and fulfillment stages. Keep your pricing and delivery policies close at hand to reference, should you encounter any uncertainties.
Contract negotiations hold a crucial position in the quote to cash process, as customer-facing representatives combine internal policies and procedures with customer needs to build a mutually beneficial (and scalable) relationship. Aberdeen research notes, “18 percent of an enterprise’s sales cycle is attributed to contract creation, negotiation, and approval.” The loss or slow-down of these processes can have an immediate and devastating effect on companies.
18 percent of an enterprise’s sales cycle is attributed to contract creation, negotiation, and approval.
Technology has vastly improved the contract stage of the process. Companies that hope to automate and reduce friction during this stage should look into finding and integrating the following software:
- Enterprise resource planning (ERP)
- Configure Price Quote tools
- E-signature or contract management software
- Customer relationship management (CRM)
- Supply chain management (SCM)
E-signature and contract management software in particular can ease the contract negotiation stage as these solutions include contract generation, approval workflows, secure e-signature, and granular sharing and notification features. Sending contracts through electronic file systems greatly reduces the time they spend in transit and speeds the negotiation process between parties.
This is why you sell products and services, so get it right. After the contract is signed and the product has been delivered, tracking and monitoring payments may be an afterthought, but this is one of the most important steps in the whole process.
Look for invoicing, accounting, and CRM programs that integrate easily. Siloing accounting away from the rest of the quote to cash process can lead to reporting errors and communication break-downs.
- Do the systems you use provide notifications for upcoming payments due?
- How does accounting communicate with sales and product delivery teams?
- Does your software record accurate records of invoices and payments?
Configure price quote software, CRMs, ERPs, and even accounting software that the company employs should all integrate and help team members streamline the payment process. Customers appreciate when payments go smoothly, without repeat invoices or unnecessary phone calls.
5. Analysis and Renewal
Congratulations! You’ve built a smooth-running quote to cash process. Take a moment to put your feet up and watch the process run itself — for maybe a couple of weeks. The final and most important step is analyzing your work, watching for contract renewal dates, and improving your margins through leaner practices.
Implementing software that both completes the assigned tasks and self-analyzes through reporting is helpful, but that’s not where analysis ends. Communication about each of the stages and follow-up with customers and suppliers will give your teams a 360-degree view of bottlenecks and inefficiencies.
* * *
Building a quote to cash process means paying attention to every stage of product development and delivery, as well as a gaining a deep understanding of customer needs and your own business objectives. Flowcharts, analytics reports, and other visualizations built into most enterprise sales tools will help your team understand your unique process. Most importantly, communication among stakeholders, sales, customers, accounting, and suppliers is crucial to success.
Top CRM Software Recommendations
Create a better way to work with Wrike work management software. Automate time-consuming admin tasks so you can focus on work that matters most. Kick-start projects and workflows with pre-built templates, increase collaboration with intuitive communication tools, and boost visibility with a variety of project views. Visualize projects with Gantt charts or Kanban boards and keep stakeholders informed with automated reporting and status updates. Anything is possible with Wrike at your fingertips.
2 HubSpot CRM
HubSpot is an intuitive CRM that makes managing your sales pipeline a breeze. Everything you need to track important metrics, set up time-saving flows and automations, manage clients seamlessly, and grow your business is available in one tidy dashboard. Plans are available for businesses at every stage of growth, starting at 100% free. Start taking the guesswork out of business management today with HubSpot CRM.
3 monday Sales CRM
monday sales CRM is the customizable, no-code CRM that allows you to control your entire sales funnel and close more deals, while simplifying communication and collaboration. Automate manual work, capture and import leads, and centralize deal and contact info, all in one place.
Need a Little Help?
Talk with a software expert for free. Get a list of software that’s great for you in less than 15 minutes.