Subscription businesses and Salesforce Revenue Cloud

By - July 31, 2023

The “subscription economy” has changed our lives, both personally and professionally, and by now we are all familiar with the Software-as-a-Service (SaaS) model that Salesforce helped pioneer more than 20 years ago. Software as a Service (SaaS) as a percentage of total enterprise software revenue rose from just 6% in 2010 to 75% in 2018, totaling more than $380 billion annually (source: Forbes). Other industries are also adopting this business model: for instance, elevator-maker Otis offers Otis ONE, a subscription-connected elevator solution that offers predictive maintenance insights (source: TechCrunch).

Salesforce Revenue Cloud is designed to manage the entire quote-to-cash process for subscription revenue models and more. In addition to subscriptions, Revenue Cloud handles one-time sales, usage-based pricing, configuration bundles, and professional services. Revenue Cloud manages all the transaction types one would expect from a best-practice solution: initial sale, upgrade, downgrade, add-on, swap, renewal, and cancellation.

Salesforce Revenue Cloud is comprised of two offerings: CPQ and Billing

Salesforce CPQ, which stands for “Configure, Price, Quote,” is a sales tool for companies to provide accurate pricing with any given product configuration scenario. CPQ applications consider optional features, customizations, quantities, and discounts, allowing sales reps to quote prices quickly and accurately. Salesforce CPQ gives sales teams easy-to-use software on any device due to its cloud-based platform. Gartner named Salesforce a Leader in the 2021 Magic Quadrant™ for CPQ.

With Salesforce Billing, you can create and automate your invoices, payments, and revenue. Salesforce Billing is an add-on package that inherits critical records and information from Salesforce CPQ. After a sales rep finalizes a quote and orders it within Salesforce CPQ, Salesforce Billing picks up the order record for invoicing, payment, and revenue recognition.

Salesforce Revenue Cloud can drive success in crucial digital transformation initiatives. For example, Salesforce customers reported a 42% increase in pricing compliance and a 34% increase in forecast accuracy.

Salesforce Revenue Cloud completes the Lead to Cash cycle

With Salesforce Revenue Cloud, companies can tackle complex order processes and support multiple revenue models. The next challenge in processing transactions is taking that order through to payment collection. Salesforce Billing completes the cycle, allowing companies to unify their sales and finance teams with more complete billing data. Furthermore, Billing can consolidate and simplify invoicing, leading to faster payments and lower costs for collections. Flexible payment terms allow for time-, usage-, and milestone-based billing plans, making it easier to meet end-user demands. And connections to payment gateways enable PCI-compliant payments via credit card and ACH.

Put CPQ and Billing together, and they deliver significant improvements to processes critical for high-growth companies: Salesforce customers report a 21% increase in forecast accuracy, a 29% increase in upsells and cross-sells, and a 33% increase in pricing compliance.

RSM has extensive experience with the critical factors to success: defining a rational sales process, including product selection; understanding the criticality of revenue recognition and its complexity; integrating the methods and systems between Salesforce and NetSuite or Sage Intacct; and pulling all these factors together into a cohesive solution.

For more information on RSM’s Quote-to-Cash services please visit our webpage.


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