If you want to optimize your sales process and get cash from the same without wasting a lot of time, here are the three amazing words for you…. Quote to Cash.
About QUOTE- TO- CASH
To configure the sales offer, the word Quote to cash is vague for many kinds of businesses. So let’s first understand the term in a simpler form.
Q2C process is all about sales. Earlier, people used software products for sales which were very complex, and the manual work involved with those software products was too much.
QTC considers the steps taken as your sales team later configures a quote and then drafts a proposal for a client, till the payment is received for services rendered.
These customer-centric systems are interdependent and must be bonded together in a single business process to make work easier. QTC is a process that is easier to use as it helps to create a single platform that allows collecting customer data, processes, and updates the data in real-time to gain effective sales results.
QUOTE TO CASH – All that you need
QTC or Q2C has become the heart of the sales process or business process these days. To see the rise in the revenue of your company, this is the process you need. It is a very critical part of businesses these days yet only a few businesses own it.
Quote to cash is the process that makes the word “closing deals” a successful and integrated system that can be managed from anywhere around the world.
The quote-to-cash process is a sales contract starting from the buyer’s intention to purchase the product or service to revenue generation for the business. This also helps to build a customer relationship lifecycle.
Traditionally these software’s were inefficient which led to a lot of manual errors and a long sales cycle. This leads to to a time loss for salespeople by 35% which they should have utilized in sales. Hence, if you waste time using the traditional methods you would lose some of the most important and efficient deals.
Quote to cash process not only makes work easier for the salesperson but also makes it efficient to assess the product combinations that are highly profitable for the business. It makes sure that the business runs smoothly.
KEY BENEFITS of QUOTE TO CASH
- You will mint more money as a quote to cash software improves efficiency.
- This process makes sure that you do not leave any deal on the table due to long sale cycles.
- Be a part of the process that is low on manual errors.
- This software provides accurate and faster results compared to the time when you relied on Word and Excel.
How does it work? We’ve got it covered!
Quote-to-cash is a part of every function or department within any organization. It starts from the time a salesperson finds the opportunity to target the potential buyer and finishes when your organization receives or generates revenue. It includes the formulation of quotes, making sales, managing accounts, fulfilling orders, looking into legality, and customer service. If this process is not optimized effectively then the company would be prone to face errors, miscommunications, delays, and poor customer experience.
STEPS TO MASTER YOUR BUSINESS – Know QTC
During the research, it was noted that many salespersons thought the process was over once the order was placed but it is not like that! The end of the process is when the cash is received and allocated. Here we discuss the most simplified process for Quote-to-cash. It is called the Q2C workflow.
We will understand the process step by step-
STEP 1: Potential target/ opportunity
This is the initial stage where the team finds a target customer or buyer in CRM and helps the salesperson create a configuration for the prospective buyer. Here, the salesperson needs to understand and research the needs of the customers and then put a step forward.
As a seller, it is good for the salesperson to learn the tactic of cross-selling products. If a customer wants a loaf of bread and along with the bread you manage to sell eggs too, you are doing a great job. But, what happens when a customer wants a loaf of bread and you cross-sell pulses. Oh, this is going to annoy them.
So, the sales rep should know the detailed product description and the exact product combination that the company has to offer to the buyer. This is the first stepping stone to success and the first checkpoint to close the deal.
STEP 2: Negotiation
This is the most crucial stage in Quote to cash workflow. It decides whether the buyer will be a part of your other stages or will quit immediately. This is the stage where one should offer all the discounts, coupons, offers, that are in the given scope. Make sure to offer lucrative discounts to the customers without any compromise on profitability This stage also depends on the strategies used by the salesperson to convince the prospective buyer.
STAGE 3: Quote
A sales quote is the document that creates a huge impact on the mind of the customer. Though this is not the final offer and the buyers can negotiate after this if they wish to. This step leads to deal closure. During this stage, the salesperson has to keep in mind that the buyer may be open to other sellers as well, therefore the quote has to be quick and error-free. This is possible only when the quote-to-cash process is optimized.
STAGE 4: Payments
And you convinced the customer. The contract has been signed and the order has been placed.
Here’s where the entire process of automation and technology plays its role. If this step is not optimized it will be difficult to streamline the entire process and to bridge the gap between all stages.
With this, it becomes easier to accept payments online or offline depending on what the customer chooses.
STAGE 5: Invoice
If you have a good QTC workflow, this stage will be error-free and automated for the organization. It is essential and critical to generate a good billing system, as it is a very detail-oriented task. It mentions the agreed quote, discounts, offers, and the final payment. If all of this is on track, the lives of the finance and sales team would be so much better, wouldn’t one want that?
STAGE 6: Revenue Recognition
What a loss if you do not record the revenue generated by your business in a given frame of time. What if your team member records double the amount generated and you can’t look for it? It will create a panic right? It is very important to automate your billing process and revenue generation because you cannot avoid human errors. It is the most important part of this QTC workflow to have a good revenue recognition system because it is difficult to handle multiple spreadsheets, billing systems, and sales invoices manually.
How to make Q2C successful?
To understand this, first, we need to go through the common errors few businesses make that one should not follow.
To begin with, the biggest drawback is that even though QTC is the heart of the business process these days, various organizations follow manual systems that lead to delays and errors.
Where do you go wrong? Ask yourself:
- Is your team going through a tough time to create competitive quotes? Do they make errors and delays frequently? If yes, then have a good look at your system and give it a chance.
- Is the order fulfillment process smooth enough?
- Do you experience payment delays? Oh god! No one wants that.
- Your invoices are not sent on time?
- Is your revenue recognition system not reflecting enough money earned? Oops, you just wasted your time
- Have your customers cribbed about QTC workflow that your organization follows or they just hinted about it?
With the answers to all these questions, I’m sure you’ve faced a reality check. A clear idea of the glitches you’ve found paves the way to use an optimized QTC workflow.
Your summary guide to Quote to Cash
This automated system helps you configure the combination of products and services to offer the buyer.
With the help of QTC, you can give superlative solutions and finalize competitive pricing strategies without having to cut down your profit margins.
When this stage is accurate, it makes it easier to create an error-free quote that is personalized as well as quick. Quick steps and quick win over the deal!
All this automation helps in the last stage of revenue recognition which makes the entirety of QTC workflow a success.
Still not convinced with the potential that quote to cash can provide?
According to research stated by Aberdeen Group, Quote to Cash came up with:
- Deal sizes that increased by 105%
- Proposal volume that was higher than 49%
- Sales cycle shorten by 28%
- Sales reps met higher targets by 26%
- Conversion rates increased by 17%.
For source check: Aberdeen Group’s “Breaking the laws of physics: shortening the last mile through workplace automation” by Peter Ostrow (April 2013).
Convinced? Let’s move ahead.
Tips to ace QTC workflow
To avoid mistakes that can or cannot be reversed, here are a few tips that one should take. The first and the most important is constant visibility at every stage of the process.
- Automate the tasks that are repetitive and are prone to errors.
- Sales representatives must be trained to generate proposals and quotes that are accurate and efficient. The negotiations should be within the guidelines stated by the organization.
- Process automation will reduce the number of sales cycle errors and the delays caused due to the same.
- Reduce the inaccuracy found in the revenue recognition stage.
- Blending legal and finances will make the contract formation easier and better.
- The opportunities of contract renewals, cross-selling, and upselling in the revenue department should be transparent enough for the businesses to grow.
- Providing briefs on sales analysis will help in future marketing strategies.
Key Takeaways – The best you pick from here
Whether your sales team is the one to formulate strategies or quotes, strategize negotiation deals, or blend payments with invoices, the ultimate quote-to-cash solutions can hold up all your sales process. When you combine artificial intelligence insights along with sales models it will empower the sales team to find the best products, at best negotiations creating accurate revenue recognition.
Hence on this note, quote-to-cash bridges uplink between high-level management, customer satisfaction, and bottom-line results.