Quote-to-cash is an automated system that manages the entire end-to-end sales process. Think about all the steps right from discussing with your customer and gathering their requirements, getting the specifications just right, pricing and quoting, customer acceptance, ordering, invoicing, and receiving payment, all the way through declaring revenue in your financial records. It also includes re-orders and renegotiations, which are common with repeat customers purchasing previously configured products.
Maintaining quote-to-cash best practices is integral to the work of your business. Regardless of what software solution you use, it helps you to quickly convert customer interest into revenues, which helps to keep healthy cash flows in your business. It’s also an aspect of your business that needs to be supported with a modernized system so that it runs more efficiently.
In this article, we’ll discuss what quote-to-cash is and how to manage it to stimulate forecasted growth and generate more revenues.
What is the Quote to Cash Process?
The Quote-to-Cash Process refers to the expedition that starts when the buyer expresses his intent to purchase the product and ends in generating revenue for the business. It encompasses the end-to-end operation of the sales activity in an organization. Hence, it is an essential component of a sales strategy.
The sales reps are required to conduct steps like cold calling and working leads before reaching the Quote to Cash stage. The official QTC starts when the customer sends a request for proposal (RFP).
People assume that the sales process is over. But it is not complete until the cash has been distributed and the entire sales cycle can be evaluated.
Why is Acceleration Significant in Quote to Cash Process?
The Quote to Cash covers all the sales operations in the company. The process initiates with the product configuration and ends with recurring revenue and customer retention, and includes everything in between.
A well-optimized QTC process:
- Automates the recurring and error-prone tasks for the sales teams
- Minimizes both ordering and invoicing errors
- Enhances the customer experience and customer satisfaction
- Enables the sales reps to generate accurate quotes and proposals
- Reduce the risk of incorrect revenue recognition
- Bring legal and finance teams on the same page
- Generate revenue opportunities for upselling, cross-selling, and contract renewals
A majority of the benefits are an outcome of accelerating initial customer interest time to purchasing, invoicing, shipping, and payment collection. The quicker you are in offering quotes to the customer and carrying other necessary functions, the faster you can generate revenue for your business.
The only disadvantage is that several manufacturers feature a steady, manual, and inefficient QTC process. You have to wait for too long to customize products, quotes, place orders, invoicing, and payment. Thus, it has a higher chance of faulty information that may lead to more details and large costs.
You should automate the QTC process if it is highly physical. With an appropriate Quote to Cash Tool, you can do it effortlessly. You can theatrically abbreviate your entire sales cycle, minimize errors, and acquire in-depth analytics that you won’t be able to achieve with the manual systems.
How to Accelerate your Quote to Cash Process using QTC Tool?
Considering all the benefits, the acceleration in the Quote to Cash process becomes essential. To do this effectively, we should integrate automation with robust Q2C Software.
Step 1: Automate Visual Product Configuration
If you want to ace up the QTC, you need to automate the product configuration. It is an obtuse, intricate, and vulnerable process in many businesses.
Generally, product configuration implies pulling models and part numbers out of a spreadsheet or product catalog and anticipating if they all worked together. However, the visual CPQ has changed the configuration process of several complicated processes by the sales reps.
With the help of the QTC Tool, you can configure the products effortlessly using a visual product configurator that displays the product in an interactive 3D rendering. You can modify the color, size, dimensions, and other parts of the product using a drag and drop feature. You can even zoom in, zoom out, and rotate to visualize the other details of the product.
Thus, a visual product configurator instills complete satisfaction on the part of the customers before they make an actual purchase. It minimizes the purchase anxiety related to the products and helps to make prompt decisions.
Step 2: Create More Revenue with Directed Selling
The Q2C Software reduces the workload of the sales reps as they do not have to create their upselling opportunities. Rather, with the help of directed selling, they can generate bigger deals through upselling, cross-selling, and intuitive recommendations.
It also helps to automate the process of creating renewal notifications when the subscriptions are about to expire, thereby enhancing the customers’ lifetime value.
Step 3: Streamline Pricing with Dynamic Pricing Rules, Approval Loops, and Workflows
The next step in accelerating the Quote to Cash process using the QTC tool is pricing. As said earlier, a visual CPQ solution works wonders in streamlining the pricing calculations through automation. It also includes supporting brilliant price rules to safeguard the sales reps from the struggle of formatting and number-crunching.
Automated pricing helps the company that has a complicated pricing structure, including discounts, bundles, and much more. If your business has complicated pricing, your sales reps are likely to make more errors in the quotes.
The Best Quote-to-Cash Software allows businesses to calculate the prices automatically. The visual product configurator allows the customers to watch the pricing in real-time, thereby authorizing them to make instantaneous decisions. Some companies hide their pricing structure from the customers. In that case, automatic approvals run in the background so that there is a smooth flow of communication between the sales managers and sales reps.
Step 4: Generate and Send Sales Automatically
Around half of the sales quotes fail if we make the customers wait for long. If you delay the process of creating quotes, they will move towards your competitors.
The Quote to Cash Tool helps to generate automatic quotes for the customers. It reduces much of your time in minimizing errors, and you can now utilize that time in the more important aspects of the business. These tools help to generate quotes faster and benefit both the customers and the sales reps with their accuracy, hence leading to more conversions.
Step 5: Process the QTC Order
Order fulfillment is the most critical stage in the process of QTC creation. Generally, the account manager exercises control over the continuous oversight of customer information, which includes order fulfillment. The business must ensure that all the terms are delivered properly to the customers along with the execution of order fulfillment. A lot of time flows by before processing the orders due to manual steps. It might frustrate the customer.
With the help of a QTC Tool, you can say goodbye to manual data entry work. The visual CPQ software allows the integration of ERP and CRM so that the orders are easily connected to the inventory, pricing, customer data, and supply chain. It is one of the best tools that bridge the gap between the front-end and back-end teams.
Step 6: Receive Payments
The Quote to Cash process usually ends with the collection of payments. However, it may take a lot of time going back and forth to generate an invoice and handing it to the accounts department. It is yet another manual process that is similar to extracting blood out of a turnip.
You can fully accelerate this process with CPQ automation. A strong CPQ helps to determine the late payments and payment retires automatically. This not only helps you to generate actions and get paid faster.
Step 7: Distribute Cash
Once the payments have been collected, it’s time to distribute the cash to the respective accounts. Now, you must be wondering whether the QTC software also automates this process.
The Best Quote-to-Cash Software ensures quick and precise revenue reporting in compliance with the rules and regulations of the industry laws.
Step 8: Create Budget and Cash Forecasts According to the QTC Data
The official ending of the QTC process is done after the critical analysis of the Quote-to-cash proposal. It helps in determining whether it will actually result in a sale.
With the help of the QTC tool, you can leverage the information and data collected during the process to create a budget and cash forecasts. After scrutiny, you can use the insights to develop new products, market ROI, acquire custom models, and improve sales rep performance.
Initially, the QTC process was more of an inefficient manual undertaking. The sales team used to spend considerable business resources to assemble a quote and drive customers to make purchases.
A technology-driven QTC approach is the best way to pull together the contrasting elements of the QTC workflow to ensure a smooth and cohesive process. It delivers a great customer experience and enables you to generate sales remotely.
Therefore, it does not matter whether the sales team is creating quotes, assembling the subscription packages, or negotiating the sales agreement. An intelligent QTC tool can support all the sales models and empower them to find the right products, services, and pricing for customers to generate effective results.