3 Tips for Improving Your Contact-to-Cash Cycle
Every business has a process for engaging new customers, delivering on its promise, and ultimately being paid. For many organizations, this is a very manual process, with multiple handoffs occurring between various teams and systems.
How does your business create a optimal journey both your customer and your company?
In working with many small- to medium-sized businesses, we find that many do not take the appropriate time to evaluate this process, from initial contact with a prospect to the end of the sales cycle and preparation for the next deal. However, when they do, they often find opportunities for differentiating relative to their competitors (in speed, flexibility, and customer service), increased productivity and efficiency, and better financial results.
What is your contact-to-cash cycle?
Before getting into ways to improve this process, it is important to understand what it encompasses. Often, this cycle touches almost every area of the business: from the time a customer comes into contact with the organization, through the fulfillment of their project, service, or product, until they are paid in full.
The contact-to-cash cycle runs in parallel to your customer experience — and in a time when this matters more than ever, it’s important to make sure that your internal processes can support the expectations customers have of your organization.
If you have recently noticed a decrease in customer satisfaction or increase in accounts receivable, problems may lie in your contact-to-cash cycle.
Tip 1: Align roles and responsibilities to your process (not necessarily the typical job description)
In order to deliver a superior customer experience, handoffs between sales, customer service, delivery teams, and finance must be smooth, timely, and consistent. To do this, each “link” in the chain should have a clear understanding of how it influences the rest of the process.
Take a look at who is involved from each team in ushering a customer between each phase of the contact-to-cash cycle. Are there unnecessary handoffs that could be removed? Redundancies in reporting or technology that could be streamlined? Gaps where the customer is not informed of an important change or update?
If possible, designate a member of your organization as the overall end-to-end process owner of this cycle. This person should have a deep understanding of each step, providing the necessary insight to understand the impact of changes upstream and downstream. As the subject matter expert, they understand how everything plays together, rather than counting on disparate teams or departments.
Tip 2: Stress test the exceptions
While standard processes are critical, there are always exceptions — especially when customers are involved. Your contact-to-cash cycle should be able to handle these exceptions without significant disruption.
As you review your contact-to-cash cycle, ensure that there are clear rules for quoting, pricing, and proposal development. Inconsistencies in these early-stage activities have the potential to exponentially impact downstream customer communications, product or service delivery, and payment collection.
When an exception occurs, your cycle owner should help determine if there should be a standardized process to address this in the future, or if it is truly a one-off. For instance, long-term customers typically establish a way of operating that doesn’t change over time. Exceptions are sometimes required those operations are disrupted—typically due to a specific reason. This exception is unlikely to need to be incorporated into your general workflows unless you see it arise often. Evaluating the process and identifying if an exception can become the rule may improve the customer experience and streamline internal processes.
Tip 3: Examine the role of software
These days, your software has the potential to streamline processes or significantly disrupt them. In the contact-to-cash cycle, many systems must be able to work seamlessly together: customer-facing programs, production and project management tools, and financial software.
Often, technology decisions focus more on picking the ‘shinny object’ vs. creating the optimized end-to-end process. This leads to an array of disjointed technology solutions that do not integrate well and are not operating at its fullest potential. Is an employee from the service team having to manually track down information in your CRM that could be automatically passed into their production software? Is finance regularly missing a critical piece of information required to complete payment?
Identify opportunities for streamlining wherever possible (check out our past post on evaluating new software for more info), and your team will operate more efficiently, your customers will receive more relevant communications, and your projects will come to completion more smoothly and consistently.
It is also important to ensure that the right people in your company have access to the right information and systems. This will help reduce overall technology costs: rather than a finance lead needing a license for a production system because the data is not in the finance system, for instance, they can access everything they need with a single license to their primary technology.
Bonus Tip: Don’t forget pre-sales activities!
A contact-to-cash cycle is only as strong as the processes that are feeding it. Ensure you have a strong contact engagement plan prior to purchase: one that communicates the way you create value for your customers, differentiates you from your competitors, and makes it easy for them to do business with you. Establish a strong go-to-market strategy and sales channel that is driven by your customer, ushering them into a contact-to-cash cycle that is built with their needs in mind.
Does your organization need help streamlining your internal processes in order to better support your customers? Cosgrove Partners specializes in developing end-to-end solutions, from go-to-market strategies to strategic operational frameworks, for small-to-medium sized businesses. Schedule a free advisory call with a member of our team today.