What’s the difference between quote to cash and CPQ? It almost always depends on the type of CPQ system you’re using.
In most every “quote to cash” software solution (QTC), a configure, price, quote tool is the cornerstone of the overall application, the piece of the puzzle that helps a rep turn a discussion with a prospect into a sales quote and that officially kicks off the actual sale.
However, more and more CPQ solutions are also providing functionality that helps a sales rep close the sale, collect the payment, and track every step along the way.
We’re going to discuss a few of the ways CPQ has evolved over the years to become a full-service QTC solution, but first let’s answer a key question.
Can you have a quote to cash solution without CPQ?
The answer is a whole-hearted “sorta!” The first word in QTC is quote, and there’s more than one way to create a quote. You can use Word or Excel, you can use a sales proposal template, you can even put it in a text or write it on the back of a cocktail napkin.
But… if you’re serious about getting a professionally designed, highly targeted, absolutely on-brand sales quote to a prospect – and getting it there quickly – there’s no way you’re using Word or Excel. You’re using a CPQ solution as it facilitates speed and professionalism in building, sending, and tracking quotes.
As (or perhaps more) importantly, CPQ provides a fundamental functionality in the QTC process – product and pricing configuration. The ability to both locally create and centrally administer how products are put together was a “quiet” benefit of early CPQ systems, which mostly promoted themselves as sales proposal automation tools.
But the demand for product configuration functionality has been moving away from sales quotes alone into QTC, eCommerce, and even into the hands of consumers. For example, a consumer may be selling or shopping for a camera. It’s product configuration features that automatically enable adding components or services ranging from tripods to lenses to extended warranties, etc. (Now imagine this at the B2B level where a manufacturing client can – with no help from a rep – double monthly order sizes, upgrade service packages, etc. Easy money.)
So… can you have a QTC solution without a CPQ backend? Yes, you can. You can also have a hamburger without fries… but why would you?
What makes a CPQ solution into a QTC?
In a word (rather, a few words), sales tracking and reporting. A CPQ system has within it (or should) sales analytics tools that help you see when a quote was sent, by whom, any changes made along the way, and so on.
What transforms a CPQ into a QTC is extending that tracking to cover payments as well, which can be done via a simple integration with a backend ERP or financial system that records collections and payments. In some cases, for smaller businesses, the CPQ’s ability to store Account and Contact information provides more than enough functionality to serve as a de facto QTC.
QTC sometimes provides the ability to automate parts of the collection process (e.g., sending invoices), but beyond that there’s very little a QTC can do that a CPQ can’t also do.
So… what makes a CPQ solution into a QTC? In most cases, nothing more is needed. It’s simply a different name for the same thing. In other cases, quite a bit more is needed. With IQX, it’s the former case: you’re good to go. If you still have questions, we can demo IQX for you and show you how to get all your quote to cash needs met by one of the easiest to use and most affordable CPQs on the market.
