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What an inefficient quote-to-cash really costs you

The gaps in your quote-to-cash are letting far more than lost revenue slip through the cracks.

  •   2 min read

We’re going to let you in on a little secret: pretty much every quote-to-cash is broken. And most go without noticing. Sure, you know there are inefficiencies in your processes, but it’s nothing to worry about right? Wrong. The costs of these inefficiencies go beyond your bottom line. Here are a few symptoms of an inefficient quote-to-cash system.

Poor alignment

In some cases, a broken quote-to-cash system can create tension and misalignment between your departments. This can lead to errors in quotes, orders or invoices, poor service, broken relationships with partners and worse, risk to your reputation. In turn, having to contact customers for late payment due to a broken system can cause stress or tensions with your sales team when they’re trying to win new deals. 

Employee morale

Your business culture is a direct extension of your management team. If your manager is stressed and worried due to concerns regarding your quote-to-cash system, this will reflect in the morale of your staff, especially if they’re concerned about their long-term future with the company.

Stress

A shoddy quote-to-cash system can affect more than your business outcomes. It can cause unnecessary stress from a lack of cashflow that can influence all areas of your life and business. Stress affects three areas – physical, mental and behavioral health. It’s important to ensure your organization has everything it needs to keep you and your team in good shape. 

Restricted growth

It goes without saying: lack of adequate resources means your business will be unable to grow. In order to reach your true potential, having the right tools under your belt can help your organization be successful.

Pricing

Cashflow problems can cause you to ignore your pricing model or experiment with value pricing because you’re scared to lose business. Deals are priced lower or discounts are offered to close anything possible. While cash influx is the goal, cutting your business short can cause margins to be lower than your targets, which can cause further cashflow issues down the line.

Workforce management

You hold off on hiring because cash is tight, but you know you have the work coming in. A lack of proper staffing quality and customer service can negatively impact your business. You may also be having the inverse problem where you hesitate on firing because the cost of searching, replacing and retraining is greater than struggling along with a mediocre employee.

Clients

You keep bad clients because you need the cashflow, but bad clients might not pay in a timely manner, causing strain on both your service team and bottom line.

Spending

If there are cashflow problems, Maslow’s Hierarchy of Needs comes into play, which means you’re going to default to what’s secure and safe. But making spending decisions out of fear usually means you don’t invest in your business. Cashflow problems can hold you back from taking advantage of opportunities, like sales on products your operation needs, because you lack the funds.

On the other hand, lack of cashflow can cause businesses to borrow money from non-traditional lenders, which can lead to poor credit or higher interest expenses in the long run.

Streamlining and measuring your quote-to-cash is critical. By using the right tools and tracking valuable KPIs over the year, you can gather actionable intelligence that will help you quantify ROI and make good long-term decisions on spending. If your quote-to-cash system needs a little help, Chassi is here for you. Drop us a line, and we’ll help you find the right solution for your quote-to-cash woes.

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