Finance and Accounting

Why quote to cash management is essential for sales teams

Quote-to-cash management refers to everything a business needs to do from the time a quote for a product/service is given to a customer until the purchase is made, the product/service delivered and payment received. Quote-to-cash, also known as order-to-cash, is abbreviated as Q2C or QTC. It involves sales, accounts management, order fulfilment, billing and accounts receivable functions.

Quote-to-cash management process

A typical quote-to-cash management process goes through the following steps:

Configure price quote (CPQ): CPQ entails guiding the buyer through the product configuration according to their specifications, estimating the pricing, discounting and generating a quote.

Creating a sales proposal: The next step is generating a sales proposal that includes the quote and any additional content to help buyers make purchase decisions. The proposal also includes the payment terms and conditions contract. The sales proposal is then shared with the buyer.

Contracting: This step is also known as the legal review. At this stage, you negotiate the terms of the sale with the buyer to reach an agreement and the contract is subsequently signed.

Order fulfilment: The next step after the contract is signed is order fulfilment. You will need to ensure that you fulfil the order precisely as per the timeframes and other conditions agreed upon in the contract.

Invoicing: After an order is placed, the invoice is generated by the accounts receivable department. A detailed invoice is sent to the customer to ensure that payments are made on time.

Payment processing: On receiving the payment from the customer, it is processed and the cash for the sale is collected and allocated.

Reporting and analysis: The sales teams analyse the performance at each step and prepare a detailed report on the insights uncovered.

Legacy quote-to-cash systems are ridden with several challenges like slow and inaccurate processes, etc. Besides, sales reps had to go through extensive spreadsheets and product data sheets to find any information they needed. Such lacunae leads to delayed CPQ, invoicing, payments, etc., which ultimately results in poor customer experience. 

 Automation of Q2C overcomes all the shortcomings of the manual systems and streamlines the process.

Q2C automation

Automation streamlines end-to-end quote-to-cash cycles by seamlessly managing all the independent functions. This helps sales teams to provide accurate information to clients quickly, reduce order and invoicing errors, and enhance data reporting and analysis.

Q2C automation creates a single platform where customer data can be stored, processed and updated in real time. This helps sales teams to engage clients more effectively, reduce errors and enhance reporting capabilities. It also facilitates better collaboration between disparate teams and reduces the sales cycle. 

Automation helps generate detailed and error-free quotes. This helps sales professionals in upselling and cross-selling, thereby boosting revenue. Automation also facilitates a dynamic pricing strategy that can maximize revenue while remaining competitive.

Automated invoicing eliminates human errors and delays. This not only ensures timely payments but also boosts customer experience. Automation software minimises the sales cycle required to boost customer experience and that leads to customer retention.

In an automated Q2C system, the actions of one department trigger the actions of other departments. For instance, when an order is fulfilled, the accounts receivable function is triggered to generate and send the invoice.

Technologies used in Q2C automation

Robotic process automation (RPA)

RPA is a technology that spearheads the Q2C automation process. RPA bots can comprehend aspects like what is on display, navigate systems, input keystrokes, identify data and extract data. RPA bots interact with the customer relationship management (CRM) system to record the request, generate a formal quotation in another system, and route the task to sales teams to update the marketing and accounting systems with details of the order.

Artificial intelligence (AI)

Machine learning (ML) and artificial intelligence (AI) work with RPA to make automation intelligent. Such technologies can gather more context from data by reading text or handwriting with optical character recognition (OCR). OCR can extract information from documents such as purchase orders and invoices thereby reducing the need for manual data entry. Natural language processing (NLP) captures information from images.

AI algorithms can configure pricing in real time based on factors such as demand, competitor pricing, etc. AI can also optimize order fulfilment by determining the most efficient routes for delivery.

AI algorithms can automatically match invoices with purchase orders and receipts. This identifies discrepancies and ensures the accuracy of invoices while reducing the risk of disputes.

ML algorithms can predict when a customer is likely to make a payment. This helps manage cash flows and follow-ups in case of overdue payments.

AI can also help identify suspicious transactions and identify frauds.

Data analytics 

Data analytics tools are leveraged to analyze vast datasets to provide insights into aspects like customer behavior, sales trends and order processing bottlenecks.

Cloud computing

Cloud computing provides real-time data sharing among members irrespective of their physical location. Cloud platforms provide a robust and scalable solution that can be easily accessed by all stakeholders.

Final takeaway

Automation accelerates the quote-to-cash management by providing sales teams with powerful and intuitive tools to streamline tasks and personalise customer experiences. AI-based insights throughout the Q2C cycle enable sales teams to identify the right products/services and prices for customers leading to winning results.

How can Infosys BPM help?

Infosys offers Order-to-Cash Automation solutions that streamline the process. We work as your automation partners to drive your journey of process consolidation and harmonization. Our automation solutions help you identify revenue early, improve your daily sales outstanding and boost end-user satisfaction.