How ERP and CRM Integration Facilitates the Quote-to-Cash Process

Revenue Reporting

Revenue is at the heart of your business. You can make the best product or provide the best service in the world, but if you’re not bringing in money, you won’t be in business for long. Few—if any—businesses can survive for long providing a poor buying experience for their customers, and as your business grows, it becomes harder for a sales team to deal with an increasing number of SKUs, transactions, and emails to see what’s available to promise.

Getting a buyer from intent to purchase, from purchase to invoice and shipment, from invoice to payment and from payment to accounting and recognition is often easier said than done. Added to this, with recent revenue recognition standards changing the way companies time revenue, a disparate quote-to-cash process is not only inefficient, it’s dangerous.

Today, we would like to explore the basics of the quote-to-cash process and discuss why CRM/ERP integration is necessary for businesses looking to improve it.

Quote-to-Cash: The Basics

A necessary process for any business, the quote-to-cash process spans ten steps running from opportunity to revenue recognition and renewals:

Step 1: Configuring the Product or Service Offering:

The first step in the process, the configuration phase is essential to providing potential customers with a comparable and understandable quote that is able to combine goods and services.

Step 2: Pricing

With configurations getting more complex, pricing does as well. Pricing a product, service, or combination of the two, discounting effectively, offering incentives and other consideration—these are all vital to winning a deal without cutting into margins.

Step 3: Issuing a Quote

The make or break stage in the Q2C process, the quote you send can make a positive or negative impression on the buyers. A quickly generated, accurate quote that matches a buyer’s expectations can result in a quick customer decision and possibly win you the deal.

However, generating such a quote requires a lot of information from a lot of departments, making this process complicated. Does the warehouse have an item in stock? Does the project team have a trainer or installation specialist available? Knowing what you have—and having the information readily available—is critical to winning a deal.

Step 4: Creating the Contract

Did the customer agree to the deal? Great. Now it’s time to get your contracts/legal department to finalize it. In this, the tiniest details matter as promises are enshrined in a legally documented way. For this, everyone needs visibility into the communications, terms, and conditions. At this stage, risk does exist, and all clauses need to be confirmed.

Step 5: Negotiating the Contract

Before the paperwork can get signed, the other side’s legal department needs to jump in as well. Until signed, contracts will spend a lot of time in constant flux. Negotiations between legal teams will result in dozens of small iterations, but to make the negotiations successful, you need your legal department to be well-informed while the rest of your company needs visibility into the changes.

Step 6: Contract Execution

Now that the negotiation step is out of the way, it’s time to sign the deal. Execution would seem like an easy step, but… roadblocks happen. In order to reduce the time spent finalizing contracts, you need to see who has signed, who still needs to sign, and any potential roadblock that stands in the way.

Step 7: Fulfilling an Order

Now, with the paperwork out of the way, it’s time for you to make good on the promises. Whether you deliver goods at one time, over time, or have associated goods or services added to the order, or have had to make changes based on the contract negotiations, having the right visibility across systems, ensures that everyone who needs to see it can and allows information to be transmitted to necessary parties.

Step 8: Invoicing the Customer

With the order being fulfilled, billing the customer and sending the invoice comes next. As with the initial three steps of configure-price-quote, this should be done quickly and accurately, reflecting the previous steps in the process and capturing all of the information discussed and negotiated. From here, you need to get paid, account for the payment, and continue to provide any necessary elements agreed upon in the contract.

Step 9: Revenue Recognition and Management

Once the customer pays, it’s time to recognize the revenue in accordance with your accounting basis. Another risky step in the equation, improper timing of revenue recognition may not only look bad, it could be noncompliant with the recent changes to revenue recognition standards. Timing revenue recognition by performance obligations requires that your finance team have full visibility into the details of the deal: Pricing payment terms, and delivery schedules among the most important elements.

Step 10: Renewals Management

With the recent rise of subscription billing for everything from consumer goods to streaming services to software delivery, renewals management has become even more important in recent years. Even if you don’t rely on a subscription model, a contract renewal is one of the most affordable revenue streams you can have. Knowing this, your sales team needs to know when a contract is going to expire so they know when to call, what potential upselling or cross-selling opportunities exist, and more so they can drive repeat business and reduce churn.

ERP and CRM Integration

The Role of ERP-CRM Integration in Connecting the Quote-to-Cash Process

As you can see in the process above and as you know in your sales process, getting from configuring a quote to the receiving and accounting for revenue is by no means, easy. The configure-price-quote process will require you to know if you have the necessary goods, time, and resources to deliver on a customer’s needs.

Sales needs to see the price lists, inventory, and project management schedules so they can make promises they are able to keep. From here, the legal team needs to match contract terms to the quote, the warehouse team needs to know what they need to pack and ship, and the finance team needs to know a bit from every single element of this.

This is where CRM and ERP integration and automation fits in. With ERP built to control the entirety of the business, and CRM designed to facilitate the sales process and contract creation element, connecting these two products makes sense as it provides visibility for everyone—throughout the entire process.

By breaking down silos, this integration provides a variety of benefits – it’s easier, contracts are smarter, billing is more accurate, and revenue recognition is faster. Plus, with the move to ecommerce becoming an ever-increasing part of the B2B space, this integration will become even more important in coming years.

That said, there are may ways to make this happen. Empowered by the cloud and able to leverage ever-improving technology, organizations have more flexibility and integration capabilities than ever before—today’s organizations can find ERP that has a powerful built-in CRM solution or take steps to integrate ERP with the CRM product they currently use—without hassle.

At Crestwood, we can help you take advantage of either of these initiatives. Whether you are looking for a leading ERP that can include a powerful CRM product in Acumatica or want to connect this leading ERP to Salesforce, we can and have helped companies just like you. Get to know more about us and contact us to learn more.

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