If you're a business owner, one of your top priorities is making your business's cash flow process efficient and comprehensive. Long-term profitability relies heavily on an optimized cash flow system that takes the entire quote to cash process and makes it smooth and streamlined.
For any business, the sales cycle shouldn’t be unknown or unique to each product; instead, once you build your products and/ or services, they then fall to your sales team to pitch the value of your services.
Notice the word value, which is different than price. Price is what a customer pays for a product or service. Value is how that product or service enhances customers’ lives. Sales reps pitch the value of the product or service. Once the customer is interested in a product or service, this is the point in the buyer journey where he or she is provided a quote.
The Quoting Process
The important part of the quoting process is finding out exactly what the customer is looking for and giving them the best possible price. With all quoting systems, it is imperative to make the information easy to understand so the customer can make the best possible decision.
To get the most accurate quote, spend time gauging the customer’s interest and ensure that he or she tells the sales team explicitly what they are looking for. Knowing their budget is also a bonus. This allows the configuration pricing quote to be realistic to the customer’s needs while ensuring the company gets the right price for its products or services.
Quotes should be quick, aggressive, and accurate. Quotes lacking in accuracy and timeliness will likely force the customer to look elsewhere. Without an efficient quote system, this hinders businesses from effectively moving through the sales cycle—from providing quotes to signing contracts.
After all, the faster a customer signs a contract for services or purchases a product, the faster the cash appears in your company’s balance sheet.
One of the biggest hang-ups in the entire quote to cash cycle is the creating and signing of the contract. In all transactions involving quotes, businesses should be using a contract, which should be legally verified by an attorney. Once verified, it should be put into practice with new customers—every time.
The trick is making the contract part of the process easy for both parties. Here are some ways to smooth it out:
- Keep It Clear but Thorough. When you’re drafting your initial template for your contracts, or when you’re reviewing your pre-existing template, check it for readability. If your customer can’t understand the contract, they’re going to be asking you a lot of questions. You want to make sure your contract is thorough, that’s where an attorney can help, but you also want to keep it as simple and clear as possible.
- Don’t Avoid the Addendum. If additional terms are required, then create an addendum. The ultimate goal is to spell out the responsibilities of a company down to the letter along with the responsibilities of customers throughout sales processes.
- Contract Review. Once the quote is agreed upon by a customer, have a member of the sales team walk through the contract with the customer, ensuring that they understand the contract, and evaluate any changes within the contract. This open dialogue may seem like an extra step but taking a few extra minutes to ensure contractual understanding can lead to happy customers and long-term customer relationships.
After the contract is signed, the next step is execution. For example, an electronic or automated system, such as e-sign can begin the fulfillment or procurement process immediately. This is one of the best ways to make the qtc process quicker.
Once the contract is executed, order fulfillment or development begins. Streamlined processes also secure goodwill of customers because they are updated on product or project status immediately.
Now we get to the nitty-gritty of the quote to cash process: billing. Billing should NEVER be a surprise to the customer. If your team has spent time going over the quote and the contract, then customers should understand the outcome.
At this point, the finance team gets involved. Your company may offer financing options for the customers who cannot pay in full. Financing solutions are an additional revenue stream for companies. Additionally, financing options allow quicker payment for services rendered, meaning the quote to cash process becomes that much more efficient – and profitable.
Not all contracts are paid timely, however, and collections processes are important. This is where customer service matters. Soliciting payment from delinquent accounts is not the easiest task, and it requires a bit of an iron fist masquerading as a velvet glove.
Although it may be difficult, it’s important for businesses to use a soft touch when pressing customers for back-owed payments.
Customer Retention and New Business.
Finally, the quote to cash process wouldn’t be complete without renewed business. Here is where the collision of service and efficiency is helpful. If every interaction with a customer is informative, polite, and leaves the customer feeling as if he or she is getting great value, then the customer is more likely to renew or make a future purchase.
Furthermore, the more prepared your sales team is to provide customers with the right information to expedite decisions on purchases, the quicker cash arrives into your business, allowing you to reinvest and make processes even more efficient.
The Power of Personal Touch
Technology helps businesses to automate, streamline, and step up the pace of these processes. However, it’s important for business principles to remain the same. It’s important that the quote to cash process accounts for all customer needs and to quickly address any discrepancies that may occur.
Customers also appreciate the personal touch. Regardless of the size of a business, taking a few extra minutes will likely ensure repeat business, increased customer retention, and reduced customer churn rates.
Combine your business’ long-standing principles with the efficiency powered by technology and the processes that your team has built, and the quote to cash process becomes easy to understand, follow, and makes more room for growth. The goals of your evergreen quote to cash process should be predictability, accessibility, and availability.
In conclusion, businesses combining outstanding service and efficiency win the day with today’s customers. Ensure that you are separating yourself from your competitors by applying these key principles, streamlining your quote to cash process more efficiently than ever.