Understanding the quote-to-cash process
The sales process is key for any business to be successful. Although this seems pretty simple, right from leads entering the system, generating opportunities, quotes, shipping the products or services, and invoicing the customer, this process can become complex as your business grows. The quote-to-cash process refers to the sales process right from opportunity creation to the invoice being paid by the customer.
In any business, once the marketing team completes the lead generation process, the potential leads will be handed over to the sales team. This marks the entry point of the quote-to-cash process for the sales team. The first step in the quote-to-cash process is creating an opportunity to deliver a quote to a customer. Here is a look at the high-level quote to cash process (this is a generic sales process and this can be tweaked as per the customers' business needs):
Figure 1.1 – Quote-to-cash process
The following are the major steps from Figure 1.1 for the quote-to-cash process:
- Opportunities are pending sales. You can create an opportunity in your system when the customer is interested in your business's products and services. In Salesforce, an opportunity can be created for an existing account or by converting a qualifying lead.
- Using CPQ software, you can start configuring the products and services, create product bundles, and automate product selection.
- The price is calculated automatically, and relevant discounts can be applied.
- You can then present the quote to the customer. Multiple quotes can be generated to adjust products and prices as per the needs of the customer and the terms and conditions.
- Once a quote is finalized and necessary approvals are completed, an order can be generated.
- Based on your business model and the type of product you are selling, subscriptions and contracts can be created. For example, if there is a one-time purchase such as hardware for the products and services you are selling, there won't be a need for a subscription. If you have a warranty associated with a product, then you need to create a subscription associated with the product.
- Once the customer agrees to place an order, it can be generated, and goods and services are shipped to the customer.
Shipping and invoicing is not a pure CPQ process. Salesforce Billing can be used as an add-on to CPQ and helps customers to have an end-to-end solution on a single platform.
- Finally, an invoice will be created, and the customer is ready to make a payment. Once the customer pays, billing and payments can be processed for the order.
In the upcoming chapters, you will learn in detail how to configure and implement Salesforce CPQ to automate this process. You will also see how renewals can be combined with cross-selling and upselling to increase revenue and continue selling to new and existing customers.
From the preceding brief description, you will realize the important role that the quote-to-cash process plays, from quote creation to payments for your products and services.
When the quote-to-cash process is part of an integrated system, it will result in the following:
- Revenue growth for the business
- Speed and accuracy in the sales cycle using automation
- Increased customer satisfaction
- Improved overall productivity and accuracy
- Profitability for the business
Important Note
All technical references in this book will be with respect to Salesforce only. You will be advised otherwise if a non-Salesforce-related topic is being discussed.
Now that you understand the elements of Salesforce CPQ and the quote-to-cash process, we will dive deeper into each of the components of CPQ.