RSMUS.comThe quote-to-cash (QTC) process encompasses everything from generating the initial quote to receiving payment (similarly, lead-to-cash (LTC) represents a larger part of the same process but starting from marketing leads). A streamlined QTC process is essential for companies aiming to achieve optimal customer experience and sustained company growth. However, companies that neglect this vital process often encounter a myriad of challenges that can impede growth and profitability. We cover some of these common issues below in the Challenges section.
When properly designed and implemented, the QTC process becomes an engine for efficiency, scale, and growth. Inputs like marketing dollars coupled with sales and operations effort and activities results in increased revenue, higher margin, and faster payments. In addition, a proper QTC process sets you up for improved cross-organization automation, self-service, and the data platform to support AI applications that are arriving in the market quickly. All of these benefits can greatly increase the valuation of your company.
Why an Effective QTC Process is Crucial for Your Business
The QTC process serves as the backbone for both the customer experience and the company’s revenue generation activities. By designing the QTC systems to work together seamlessly, businesses can eliminate manual errors, reduce redundancies, and ensure that you have a single source of truth for your most important data. This not only accelerates the sales and payment cycles but also provides a comprehensive view of the customer journey, enabling better decision-making and strategic planning.
Key Benefits of an Optimized Quote-to-Cash Process
- Improved Accuracy: Consistent data across systems and organizations reduce the risk of errors that can occur with manual rekeying of data.
- Faster Sales Cycle: Streamlined workflows and integration between systems speed up the transition from quote to order, and eventually, to cash.
- Enhanced Customer Experience: A smooth and efficient process ensures that customers receive accurate quotes, empowered assistance from customer support, and timely invoices, leading to higher satisfaction and loyalty.
- Better Forecasting and Planning: Real-time data and insights enable more accurate demand forecasting for sales, manufacturing and finance.
- Increased Revenue: By reducing bottlenecks and improving efficiency, companies can close deals faster, recognize revenue and receive payments more quickly.
Common QTC Challenges
Companies that fail to invest in a robust quote-to-cash system often encounter several recurring issues that hinder their growth and operational efficiency. Some of the most common challenges include:
- Data Inconsistencies: Without a unified system, companies often struggle with inconsistent data across different platforms. This can lead to discrepancies in quotes, orders, and invoices, causing confusion and frustration for both employees and customers.
- Manual Errors: Reliance on manual processing increases the likelihood of human errors, such as incorrect data entry, invoicing mistakes, and inaccurate order fulfillment. These problems can result in financial losses and damage to the company’s reputation.
- Delayed Sales Cycles: Inefficient processes and lack of integration can slow down the sales cycle, making it difficult to put together accurate quotes, receive timely approvals for standard and nonstandard changes and automatically flow quotes into orders. This delay can negatively impact cash flow and overall business performance.
- Poor Customer Experience: Customers expect a seamless and efficient experience from quote to payment. When companies fail to deliver accurate quotes or timely invoices, it can negatively affect your brand.
- Resource Drain: Manual processes and rework consume valuable time and resources that could be better spent on higher value customer touchpoints. Efficiency in process and data along the entire QTC lifecycle enables your team to drive higher value interactions with your best customers.
For a more in-depth understanding and practical tips, check out this comprehensive e-book by RSM on How to create an effective Quote-to-Cash process.
Quote-to-Cash Greatest Hits
When companies have a disjointed QTC process, a number of common problems surface. Some of the most common examples include:
Approval and Processing Delays
- My quote is taking days to approve from legal and finance for even the most common changes
- My customer has amended the contract, and we have to manually adjust everything – the order, the invoices and revenue schedules
Data Inconsistencies and Errors
- I have multiple duplicate customer records each with different data
- My quote forms do not match with what is in the ERP because I have to hand key and transpose the data
- I have multiple shipping and billing addresses and don’t know which one is the correct one
Operational Inefficiencies
- Our customer service agents aren’t able to access what was actually provisioned or shipped to the customer
- The sales representative is unaware that this customer has multiple overdue invoices while preparing the latest proposal
- Our manufacturing department and finance cannot get timely and accurate forecasts from our CRM system
- Our reporting is done manually and is only produced monthly or weekly versus on-demand
Customer and Revenue Impact
- My customer keeps delaying payment because the invoice is unclear or doesn’t match the quote
- Our renewal process is unsystematic, and we are leaving revenue on the table
- Our ability to leverage self-service and AI seem very far away with our disconnected systems and data
These are just a handful of common problems when QTC is not designed or implemented well.
It All Starts With Design: How RSM Can Help You Optimize Your QTC Process
Any time you purchase or modify your CRM, CPQ, CLM and/or ERP system, it is an opportunity to make your overall QTC process more aligned with best practices. Ideally, you have a goal and design in place so that each organization and application can march towards an overall vision – whether you digitally transform in phases or all at once. This minimizes wasted effort and rework and enables you to benefit from a streamlined QTC process much faster than if you approached it in disconnected silos.
RSM has advised many clients on their QTC strategy, understanding current state against best practices and designing custom solutions that leverage the unique advantages of each organization. Having a QTC strategy drives immediate and sustained improvements and sets the organization up for automation, self-service, and a data platform for leveraging new AI applications coming into the market.
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For a more in-depth understanding and practical tips, check out this comprehensive e-book by RSM on How to create an effective Quote to Cash process.
