How Long Does It Take to Get from Quote to Cash?

quote to cash The quote to cash process is problematic in ways that negatively affect profitability. As you incorporate a more complex set of services or product-service combinations into your offerings, there are a growing number of information disconnects that can occur; each one poses a threat of revenue leakage or failure to optimize offerings and deliverables.

In this post, we discuss the five high-level challenges that negatively affect the process of going from quote to cash.

Issue #1: Configuring Offers

Both service-only companies and product companies are seeing an upswing in deal complexity wherein they must offer more complex combinations of services or products and services to attract new customers. Unfortunately, sales representatives often struggle to keep pace with the increasing number of offerings – not only because of their complexity but also because there’s rarely an easy and intuitive way to locate and apply them to specific sales opportunities. This leads to ‘leaving money on the table’ or making offers that cannot compete with more adept competitors.

Issue #2: Quoting for Speed and Profitability

Many sales proposals that involve complex offers get bogged down in the initial quoting stage. If the quote isn’t realistic, you risk charging too little and losing money or charging too much and scaring the prospect away. Your salespeople must be able to quote both accurately and quickly to win deals. As such, they require an easily accessible view into past activity – what similar deals were won? Which promotions were most effective? Did specific prospects respond to specific incentives? Your sales reps need answers to these kinds of questions before they can correctly assemble a quote.

If you don’t have a good historical view of past profitable deals, however, you’ll struggle with quoting; salespeople will ‘guesstimate’ instead. Guesstimates hit the ‘need for speed’ but are riddled with errors that make your company appear unprofessional and require rework to do the job right.

Issue #3: Contract Creation

The physically signed contract dictates the details of services to be provided, of course; if you get the terms wrong, your company is in danger of having to perform extra, unpaid work. Many companies fall into this trap because they lack a shared, version-controlled project management system that allows all contract-creation personnel to view edits, modifications and ongoing adherence at a single shared location.

Issue #4: Service Delivery

Once the contract is signed, the service delivery team usually receives high-level guidance concerning the project. But again, details matter and many companies fail to deliver the right combination of products and services in the manner contracted. This occurs because of poor coordination and no visibility into a unified system that shows all project requirements and their associated, ongoing changes.

Issue #5: Invoicing

Proper invoicing is critical to the success of a relationship; unfortunately, many companies invoice improperly for their services projects. This happens for several reasons, including:

  • Having no standardized and integrated way to capture employee time and expenses, particularly when project team members originate from different departments or geographies
  • Poor linkage between invoicing and recognition of opportunities to bill for extraordinary efforts (e.g., overtime, holiday pay, meeting incentive-based deadlines, etc.)
  • Lack of insight into project status to know if ‘final’ really means ‘final’
  • Error-prone manual processes for tallying the variables that make up the invoice

Not only can inaccurate invoicing hurt profits, customer relationships also suffer when your company attempts to recover unbilled amounts with additional invoices.

Conclusion

The common thread that runs through all the problems in the quote-to-cash process is the lack of a unified and visible project management system that integrates into CRM and ERP to give you a complete picture of what to offer, how to offer it, what to deliver and how, and how to get paid. When companies unify the information and workflows surrounding these critical elements of service delivery, they can stop the revenue leakage and maximize their services profits.