The quote-to-cash (Q2C) process is an essential part of the sales cycle that helps drive revenue for your organization. Q2C (often referred to as QTC) streamlines the quoting, contracting, and ordering sales processes to allow for greater efficiency and better visibility to improve business outcomes. When you optimize the Q2C process into your business, you can speed up sales cycles, create better buying experiences, and close deals faster. Learn about the 8-step quote-to-cash process and how PROS innovative CPQ software solutions can transform the way you do business.
What is Quote-to-Cash Software?
Quote-to-cash software supports the full Q2C business process. Integrated Q2C technology accelerates the sales cycle by delivering customer and pricing insights that drive efficiencies in the workflow. By automating quoting, contracting, and ordering processes into their business, sales teams are able to propose deals, deliver the right agreements, successfully fulfill orders, and increase renewals with more accuracy and speed.
What is CPQ?
Configure, Price, Quote (CPQ) is an integral part of the quote-to-cash process that allows teams to quickly configure personalized offers, generate pricing, and produce custom quotes for customers. But what is CPQ as it relates to quote-to-cash? The CPQ software quickens the Q2C process by enabling sales teams to create error-free configurations, generating accurate pricing and quotes that factor in discounts, customizations, and optional product features.
The 8-Step Quote-to-Cash Process
The 8-step quote-to-cash process covers the entire sales cycle for your business, including opportunity management, CPQ, order fulfillment, invoicing, payments, and customer renewals. These steps give sales teams the necessary tools to enhance sales performance, engage clients more effectively, optimize sales, and improve customer journeys.
1. Lead and opportunity management
In the traditional quote-to-cash processes, the first step is typically identified as product selection or configuration. However, leading vendors with advanced capabilities and integrations are enabling sales teams to start earlier in the sales cycle with lead generation and opportunity management. Starting earlier in the sales cycle allows companies to automate a lead-to-cash process.
In this new first step, companies integrate lead and opportunity management capabilities, which helps organize and distribute new prospect leads to sales people. Advanced lead generations solutions that integrate AI are taking this a step further by identifying new sales leads within existing customers.
Vendors like PROS enable companies to surface new sales opportunities by using AI to parse historical transactions, uncovering new cross-sell opportunities based on customer preferences and purchase behavior. With an AI-based lead generation solution, you can enable your sales team to focus on selling to existing customers who have a higher likelihood of closing, resulting in incremental revenue.
2. Product selection or configuration
The second step of the quote-to-cash process starts with CPQ: In this phase, teams identify and/or configure the right products and services for customers. This stage is crucial to the Q2C process as the first step toward building a quote for the client. CPQ tools automate and accelerate the sales process by helping sales teams to find or configure the most complex products or services in minutes. This eliminates quote errors that can be caused due to incompatible options being incorrectly configured together.
Leading CPQ solutions also infuse AI based insights during the product and configuration process providing recommendations that enable sales teams to personalize the product offers to customer preferences. For example, PROS Smart CPQ integrates advanced AI capabilities providing sales teams with AI based cross sell compliments for each product selection. Smart CPQ also includes a fast configuration feature that enables sales to get configuration recommendations that are tailored to a buyer's preferences with a single click.
With CPQ software, product configurations are easy to set up and maintain, allowing you to continually release differentiated solutions to your customers quickly without needing long training sessions.
In the third phase of Q2C, discounts, promotions, and bundles are applied to pricing for the selected or configured products and services. In this step, sales teams can get price recommendations based on your internal price strategy or optimized prices that guide a customer’s willingness-to-pay.
These price strategies can also account for real-time market indices which can cause fluctuation in your raw materials cost. By establishing pricing and promotion strategies for your clients using CPQ tools, sales teams can quickly analyze and maximize deals.
CPQ tools that infuse price optimization recommendations enable sales teams to deliver the right products at the right price for every deal.
The fourth phase of quote-to-cash is quoting: This step can include a number of actions such as making mass modifications to the quote, analyzing the performance of the deal, and even managing the terms and conditions for that deal. CPQ solutions ensure that the final quote created for the customer contains no errors while still providing the best solutions to fit the buyer's needs.
Advanced Q2C solutions include powerful quoting capabilities that enable power users to manage large quotes and RFPs. Large RFPs can get unwieldy when trying to manage, and solutions with powerful quote capabilities enable sales users to modify and analyze sales deals without experiencing performance degradation. For example, PROS Smart CPQ enables sales teams to make quick modifications to large quotes with up to 100K line items with no response time lag.
Once items on the quote are final, quote-to-cash software can quickly generate proposals with all the applicable attached documents such as drawings, bill of materials, etc.
The next step of the Q2C process includes managing legal language and the scope of the final contract. Contract management integration ensures your sales team is creating, negotiating, and complying with all legal terms and clauses necessary in creating a successful sales contract.
6. Order fulfillment
After the contract is finalized, the next step is fulfilling the order by processing and delivering the products to the customer promptly. An integrated quote-to-cash solution allows teams to review final orders, assessing all changes and requirements before delivering the final products to customers.
7. Billing and invoicing
The next step involves finalizing the bill and sending the invoice to the customer. In the quote-to-cash process, all matters of discounts and billing timeframes are automatically passed on to accounting to ensure billing accuracy. Companies can then quickly reference contracts and invoicing information to be more effective when renewing contracts or growing recurring business.
8. Amendment and renewals
The final step involves retention and recurring revenue management. Sales teams often need to make modifications to sales agreements or price contracts and integrating Q2C solutions that automate this step saves time and eliminates the likelihood of errors. With integrated amendments workflows, sales teams can make modifications to the products, prices, or terms for the deal with customers.
In addition to easing the amendments process, Q2C solutions can also automate the renewal process for customers, ensuring that salespeople have the most up to date information along with analysis tools to renew the business deals at a favorable position for both the customer and your company.
Advanced Q2C solutions enable sales teams to make quick modifications to single or multiple contracts simultaneously. This greatly speeds up the time it takes to deploy modifications such as price changes to existing sales agreements and contracts.
What are the Benefits of the Q2C Process?
Businesses that utilize quote-to-cash solutions can benefit from increased productivity, accuracy in quoting and pricing, quicker order fulfillment, and ultimately deliver better customer experiences. Implementing Q2C processes allow companies to:
• Identify sales opportunities with existing customers
• Accelerate sales teams’ responsiveness and delivery
• Eliminate common quoting errors
• Personalize quoting offers with AI driven insights
• Automate approval cycles
• Generate fast automated branded proposals with quote content
• Minimize order and invoicing errors
• Increase retention with a fast and automated renewal process
PROS Quote-to-Cash Solutions
Whether your teams are creating quotes, putting together subscription packages, or negotiating sales agreements, intelligent quote-to-cash solutions can support all your sales models. The PROS Commerce Platform accelerates the quote-to-cash process by giving your sales team the powerful, intuitive tools to automate tasks and personalize every offer for every customer. Integrated AI-based insights throughout the sales journey empower your team to find the right products, services, and prices for customers with winning results.
About the AuthorMore Content by Loretta Faluade