A sales cycle is a crucial process in the highly competitive B2B market. In its turn, lead management is the critical part of the sales process as it may turn prospects into revenues. Lead management includes two stages: Quote-to-Cash and Order-to-Cash.
At present, many enterprises strive to get ahead of competition and look for a Quote-to-Cash solution to automate sales processes. While terms are often used interchangeably and the solutions have been developed for the intelligent automation of the sales cycle, they represent different processes.
Quote-to-Cash: Process, Features, Functionality, and Benefits
The term “Quote-to-Cash” embraces all stages of the sales cycle, from offer creation to revenue recognition and subsequent up-selling.
The Q2C process includes the following steps:
- Quote/offer configuration. A sales representative creates a quote for a potential client.
- Pricing. Given the offer details, a sales team needs to provide accurate pricing for the offer. Quite often pricing can be multi-layered and include discounts and promotions. The faster you deliver the quote the higher the chance is to complete the sale.
- Quoting. Once the optimal price is determined, the sales reps create a detailed quote and deliver it to the potential client. At this stage, the quote should include all the details to close a sale.
- Contract management. If the customer accepts the quote, a contract is prepared. Efficient contract management within the quote-to-cash process lowers administrative costs and ensures compliance with the existing regulations and policies.
- Order management. Automation of order management processes ensures that the company accepts orders it can complete.
- Billing/invoicing. Once the quote is accepted, the accounting department prepares an invoice and sends it promptly to avoid payment delays. In case of an automated solution, all the required data is delivered in real-time, so invoices can be created almost immediately.
- Revenue recognition. Accurate revenue reporting, particularly in the recurring deals, is essential for financial projections and forecasting.
- Renewal/upselling. Contracts can be renewed at this stage. This is also a great opportunity to up-sell or cross-sell using the information stored in the system.
How do businesses benefit from an automated Q2C process?
- Automation helps to streamline the sales lifecycle through optimization of interaction of various departments. The sales cycle becomes shorter leading to improved customer experience.
- Elimination of quote errors. Automation of Q2C processes helps to minimize human errors. With elimination of manual data entry, data is shared between departments in real time; hence, order and invoice errors are minimized.
- Improved customer retention. Great customer experience means fast and accurate quotes, contracts, and invoices. Streamlined business processes notably improve customer experience.
- Increased revenue. An automated sales process helps to seize new sales opportunities and boost corporate revenue.
Order-to-Cash: Process, Features, Functionality, and Benefits
The OTC solution represents an order management system and plays a crucial role in customer interactions. The process encompasses all stages, starting from order placement to order receipt and payment. In other words, order-to-cash embraces all steps required to deliver the ordered product. Automated order-to-cash processes ensure efficient order execution and an outstanding customer experience.
O2C is often considered as a constituent part of the Q2C process with the exception of the CPQ stage and delivers all the benefits of automated order management.
Quote-to-Cash vs. Order-to-Cash
- OTC is commonly considered as a subset of QTC. OTC is managed within an ERP system and starts from the order placement, while QTC encompasses a wider range of operational processes, starting from making a personalized offer at the best price. Integration of OTC and QTC provides a seamless buying process for customers and ensures a streamlined sales workflow.
- The key difference between two processes is presence/absence of CPQ (Configure, Price, Quote), which is the first stage of the Q2C process. As the name implies, CPQ includes determining the required product configuration, setting the price, and delivering the quote to the customer. Automated CPQ process accelerates the quoting process, eliminates risk of errors, and provides a solid background for cross-selling and up-selling opportunities.
- While O2C solutions process information from customer contracts, the contract creation itself happens out of the O2C. On the other hand, Q2C incorporates multiple stages of the contract management: negotiations, contract execution, and revenue recognition.
Why Choose CLARITY as a Quote-to-Cash Solution Provider?
In the extremely competitive business environment, fast and error-free processing of the sales cycle enhances client satisfaction, accelerates sales processes, reduces the risk of errors, lowers operational costs, and opens new revenue growth prospects. Additionally, a custom-tailored Q2C solution provides real-time reports that empower sales teams with data-driven insights for future marketing and sales campaigns.
At CLARITY, pros develop custom-tailored Q2C solutions that address unique business needs and are fine-tuned to ensure the fast and efficient sales cycle. Automated, fast and error-free workflow boosts performance and opens up new opportunities for increased revenue and business growth.
The team of dedicated and experienced pros can develop a tailored solution and ensure smooth integration into the available infrastructure. Additionally, CLARITY partners benefit from:
- Individual approach to every project
- Comprehensive guidance during the implementation process
- Training for employees to learn the functionality of the software
- Excellent customer support 24/7.
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