Designed to accelerate cash flow, quote-to-cash (Q2C) processes are plagued with complexities and manual effort that lead to errors, bottlenecks, and reduced profitability. Beginning when a prospect expresses interest in your products or services and ending when you recognize revenue, quote-to-cash management spans the entire customer lifecycle. Many times described by a 7-step process, Q2C covers the entire sales cycle, including:
- Lead/Opportunity: The first step in closing the deal, this process begins with the configuration stage of configure, price, quote (CPQ). Aside from CPQ software, your customer relationship management (CRM) system plays a vital role in automating and accelerating the sales process and eliminating errors.
- Price: The price is determined by your internal pricing and promotional strategies. At this phase discounts, coupons, promotions, and bundles are applied to the configured products and services. However, care needs to be taken when applying any sort of discount to ensure a healthy bottom line.
- Quote: Although this may not be the final offer, the quote needs to be personalized and accurate to ensure communication with the customer continues, which hopefully leads to a signed contract.
- Contract: A contract is created, the terms are negotiated and the contract is executed. To create a successful contract, it’s essential that all contract terms and clauses are identified and documented.
- Billing/Invoicing: Once the order is fulfilled, the bill is finalized and an invoice is sent to the customer.
- Payment: At this step you’ll collect payment for the product(s) provided or services rendered. Make it easy on your customers and ensure faster payment by offering a wide variety of secure payment
- Revenue recognition: Although you’ve already received payment, it doesn’t necessarily mean you can recognize the revenue. With ASC 606 and IFRS 15 in force, it’s important that you only recognize revenue once it has been earned.
As you can see, these processes touch nearly every function within your organization, including marketing, sales, service, order fulfillment, finance, and legal. With so many moving parts, it’s easy for one or more of these processes to become derailed. To keep your entire Q2C processes running smoothly an evolution is taking place. One that is based on improving the buying experience and maximizing revenue potential, and it’s called Revenue Operations (RevOps).
What is RevOps?
RevOps is a methodology to drive efficient, predictable revenue and improve the buying experience. Perhaps the best description of RevOps is one provided by Forbes.
“RevOps recognizes that revenue isn’t just an outcome but rather a full process that involves the strategic convergence of sales, marketing and customer success (CS). It’s the end-to-end process of driving revenue, from the moment a prospect considers a purchase (marketing) to when you close the deal (sales) to their renewal and upsell (CS). The result of this orchestration is faster growth and more profit.”
As acknowledged by Gartner, RevOps is a new functional role that is emerging in many fast-growing B2B organizations. Although RevOps is still in its early stages, it’s quickly making its mark as companies look for a way to unify siloed functional teams in order to drive revenue and grow the business. For example, throughout your Q2C processes each siloed department works towards specific team-based goals and key performance indicators (KPIs). More often than not this results in a disconnected customer experience – and in many cases money left on the table.
RevOps is all about consistently and intentionally improving the customer experience, which means increased customer lifetime value (LTV) and more predictable revenue streams. Essentially, the teams that are responsible for driving revenue – sales, marketing, and CS – must be aligned and share a common goal.
RevOps is based on three pillars, with each one building off the previous one.
This pillar requires you to put processes in place that will create collaboration across teams. Once in place, cross-functional team members ware more aligned and work in a more collaborative manner. This in turn lessens sales cycles, improves customer retention, and delivers greater upsell opportunities.
Within most organizations, data is spread across organizational silos and technology stacks making it difficult, if not impossible, to have a single view of the truth. By connecting and aligning your data and technology, team members will always have the most accurate information for any revenue-generating situation they encounter.
Whether you have a large organization and create a RevOps team or a smaller company and distribute RevOps responsibilities across existing team members, this pillar is about aligning the team members around a single view of the business to reach shared revenue targets.
With RevOps, companies get greater transparency, accountability, and predictability from the highest levels down to frontline workers. And the benefits don’t end there! Forrester found that public companies with RevOps are seeing 71% higher stock performance.
Quote-to-Cash Management – Re-imagined
While solid quote-to-cash management provides the basis for successfully moving your opportunities to revenue recognition, it’s no longer enough. Q2C provides the foundation to take your organization to the next level and reap the benefits that you can only achieve by combining Q2C with RevOps. By evolving quote-to-cash management to include RevOps you can accelerate revenue potential, improve the buying experience and grow your business faster. Reach out to our team to see how BillingPlatform can help get you started.