Frank Sohn, President & CEO at Novus CPQ Consulting got a sneak peek at Logik.io and wrote his own third party take on how Logik.io fits into the CPQ...
Choosing the Best Quote-To-Cash Software for Your Business
Quote-to-cash software encompasses the entire sales process, from product configuration to order fulfillment. Here’s how to choose the best solution.
Quote-to-cash (QTC) involves a variety of functions in sales, billing, order fulfillment, accounts receivable, and account management to facilitate the sales process.
With the help of configure price quote (CPQ) software and other solutions, businesses can optimize the QTC process to quickly and accurately complete custom quotes.
What Is Quote-to-Cash?
Quote-to-cash encompasses the entire sales process, beginning with product configuration and continuing through to pricing and quoting, followed by order fulfillment and revenue management.
The process is potentially complex in many instances, requiring businesses to develop and present an accurate custom quote based on the customer's unique requests and inputs. Once the customer has approved the quote, the sales process involves requesting and processing payment from the customer.
Keep in mind that when custom product configurations are involved, the experience for repeat customers can be different with every order. Every time a customer returns, they may develop a new custom configuration that requires an accurate quote that the business may need to negotiate.
The quote-to-cash process is vital for any business that offers configurable products. As such, it's important for companies to do what they can to maximize the efficiency of this process from start to finish.
What Does the Ideal Quote-to-Cash Process Entail?
In the quote-to-cash process, businesses typically follow six basic steps. These steps are as follows:
1. Product Configuration
At this point in the quote-to-cash process, customers interact with a product configuration solution or salesperson to select the options they want. For example, on an eCommerce website, the customer may interact with a product configurator tool that enables them to choose different product features and enter custom specifications. This helps prepare the quote on the company's end before presenting it to the customer.
2. Pricing and Quoting
Once the customer has made their custom selections, the sales department will figure out what resources are required to produce the final product. Sales staff will calculate the cost of materials needed to produce the item along with the amount needed for the quote to make the sale profitable. From there, the sales team will determine the final price of the product and provide the customer with an in-depth, accurate quote.
3. Contract Management
After configuration and quoting take place, the contract management phase can begin. This entails the negotiation of contract terms with customers. The company can also make agreed-upon modifications to the contract until both parties come to an agreement. After the customer signs the contract, the company can begin fulfilling the order.
The accounting department will be able to invoice the customer for the product after reaching an agreement. The customer will then provide payment based on the amount quoted.
5. Order Analysis
Following the billing process, the company can begin looking closely at orders to determine what customers like or what features might be missing. This can help with marketing, advertising, and sales to attract more prospective customers and more effectively reach target audiences. Based on what's working and what isn't within the existing QTC process, you can make additional improvements.
6. Repeat Sales
Customers who have previously made purchases may opt to come back to you for more of the same item, or they may purchase different products. In the process, you can lead existing customers toward more purchases of the same product, or you can make unique recommendations for other similar items or features based on previous orders.
When all six of these steps are optimized, businesses benefit from consistently efficient operations.
How to Improve the Speed and Efficiency of the Process with Quote-to-Cash Software
If the quote-to-cash process is too slow, this will lead to increased resource consumption and costs, along with an inability to effectively monitor, predict, and realize anticipated revenue after providing services and delivering products. Businesses need to maintain a good relationship with customers to encourage sales and maintain loyalty. Because of this, an inefficient quote-to-cash process may wind up convincing customers to turn to more efficient competitors who offer a better overall experience.
If you want to develop the ideal quote-to-cash process, there are a few key types of quote-to-cash software that can help, including configure price quote (CPQ), customer relationship management (CRM), and enterprise resource planning (ERP) tools.
One of the best tools to use to streamline the quote-to-cash process is CPQ software, which both customers and sales teams can use to generate accurate quotes based on custom configurations.
After either the customer or salesperson enters certain options, the software then uses this information to determine what the final price will be. CPQ software can also help determine whether custom options are compatible and allow for the production of a viable product. At this point, the software will ideally be able to create a bill of materials to help guide the manufacturing process.
The customer will see a quote for the product and be able to approve it or negotiate a different quote. Once ordered, the company can begin building the product.
CRM solutions help maintain customer relationships through consistent communication. It achieves this by updating contact information and details about customers based on previous interactions. This information can ultimately help with future marketing and sales efforts in accordance with customer preferences.
An ERP tool can assist with inventory management by keeping track of available inventory and indicating when you require additional inventory or resources. In turn, you can make sure that you have what your customers want and won't experience potential delays due to insufficient inventory, which could otherwise frustrate customers.
Together, these software solutions can combine to fully optimize and help automate the QTC process.
How Logik.io Can Improve Your QTC Process
In need of the right CPQ software to help you increase the speed and efficiency of your company's QTC process? Learn how Logik.io can help streamline and automate the configuration aspect of your QTC process for direct sales and eCommerce.
Contact us to learn more about our configuration engine.