In the highly competitive business environment, sales performance is a crucial factor. Quote-to-Cash and CPQ are two instruments designed to automate and facilitate sales processes. Let’s examine the features and advantages of both systems and discover how to choose the best solution for your company.
Quote-to-Cash & CPQ: Tools for Sales Optimization
While both technologies have been developed to automate and optimize sales processes, they differ in their functionality, complexity, industry applications, and integration.
CPQ: What Is It?
Configure, Price, Quote technology that is commonly addressed as CPQ helps enterprises of different complexity streamline and automate sales processes; the tool is particularly beneficial for enterprises offering customizable products and services. The system automatically configures product offerings, prices them accordingly, and generates quotes.
Automation of operational processes significantly accelerates the workflow, minimizes the risk of errors, and optimizes a sales-related workflow.
Key Features and Benefits
CPQ software helps sales teams to:
- Accelerate the quoting process.
- Minimize errors as the system automatically uses a centralized data source.
- Track information from the coordinated CRM system.
- Customize quotes and contracts to meet individual requirements.
Benefits:
- Improved efficiency. Quotes are generated automatically, shortening overall sales cycle time.
- Improved accuracy. The automated quoting helps to minimize errors due to pre-set pricing rules and access to centralized in-house data sources.
- Consistent pricing. CPQ ensures alignment of pricing with the company’s strategy and pre-set rules.
- Scaled up sales efficiency. The system provides data-based analytics for relevant upgrades, cross- and up-selling. Automated reports provide valuable information on configuration and pricing trends and facilitate decision-making.
Quote-to-Cash: What Is It?
Quote-to-Cash, often referred as QTC or Q2C, covers all steps of the sales lifecycle, from quote creation to payment processing. The software coordinates all essential components of the sales lifecycle: a quote is created and transformed into an order, which is later processed and shipped. The technology can automatically issue invoices and even process payments. The final stage is revenue recognition. In other words, the tool automates the entire sales lifecycle.
Key Features and Benefits
The Q2C functionality extends beyond CPQ and includes the following components:
- Quote generation. Similar to CPQ, quotes are generated automatically.
- Contracting. Q2C ensures smooth coordination between sales terms and legal agreements.
- Order fulfillment. Once a client accepts a quote, the order is processed (inventory management and delivery.)
- Billing. Invoices are generated automatically based on usage/purchase data.
- Revenue recognition. The solution ensures accurate financial reports and compliance with existing accounting regulations.
Benefits:
Implementation of Q2C software:
- Improves consistency of the sales lifecycle. Automation of the workflow ensures an uninterrupted sales process with no delays or errors.
- Boosts sales efficiency. The higher quoting and pricing accuracy and a straightforward sales cycle result in greater efficiency.
- Ensures compliance with existing regulations.
- Improves customer experience. Clients get personalized quotes faster, contracts and payments are automatically processed.
- Provides higher operational visibility. Sales teams receive a detailed view of the entire sales process.
- Delivers valuable insights on customer preferences and behavior; analytical reports allow the responsible staff to see trends and fluctuations in sales.
CPQ vs. Q2C
The comparison chart below illustrates the major differences between two tools:
| Parameters | CPQ | Q2C |
| Main functions | Configuration, pricing, quoting. Workflow approval | Quoting, contracting, order fulfillment, invoicing, and revenue recognition |
| Scope | Quoting, from product/service configuration throughout to quote generation | End-to-end sales lifecycle: quoting, order fulfillment, contracting, invoicing, and revenue recognition |
| Complexity | Simplifies quoting; suitable for companies with tiered (multi-level) pricing policy and product/service configuration | Automates complex processes for companies with an extended array of products and complex client contracts |
| Analytics & Reporting | Provides data about the efficiency of quotes, price optimization | Complete insights into the sales process (contract compliance, revenue, and profitability) |
| Compliance & Control | Focus on the accuracy of pricing and compliance with pricing policies | Focus on compliance of the sales cycle with existing financial and legal regulations; control over billing and contracts |
| Industry Applications | Beneficial for businesses with customizable services and products, where quote accuracy is a decisive factor | Versatile applications; suitable for enterprises with complex sales system |
| Integration | Can be integrated with CRM to access client data and coordinate quotes with client profiles | Can be integrated with diverse systems and apps, including ERP, CRM, and financial instruments |
CPQ can be considered as a part of the Q2C process because besides configuring, pricing, and quoting Q2C solutions cover invoicing, contracting, and payments. At the same time, implementation of a fully-blown Q2C solution requires experienced pros for seamless functioning within the corporate IT infrastructure, while CPQ software is easier to install and qualified in-house IT staff can deal successfully with a task.
How to Make the Right Choice
While selecting the right instrument for your business, reason from the specific requirements of your company.
If you are concerned about strict compliance control across the industry, Q2C provides full compliance management. The same applies to integration: if a business has a complex IT architecture and diverse instruments, seek a reputable Q2C provider to ensure flawless integration with the available infrastructure. For businesses that offer customizable products and rely primarily on CRM, CPQ solutions might work just fine.
CLARITY — Quote-to-Cash Solutions Provider
To stay ahead of competitors, digital transformation is inevitable. Businesses implement advanced technological solutions to optimize and speed up the workflow processes. The right choice of the technology and seamless integration of Q2C solutions within the corporate IT infrastructure represent a powerful instrument of business optimization.
CLARITY, a Q2C solution provider, has deep expertise in Q2C software implementation. The team has helped many enterprises (smaller local companies and international corporations) to streamline in-house operations, optimize overall performance, and boost profits. Individual approach to every project and custom-tailored development of software solutions help to address industry-specific needs and achieve better results in Q2C optimization.
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