From Quote to Cash

Many small businesses suffer from the quote to cash cycle.  With many small business owners that I talk to, who work IN the business, delivering products and services, there is always a challenge to balance workload.

You work hard to get a sale, then work hard to deliver.  In many cases, these jobs are back to back, with a need to start working on the second, the minute the first is completed.

With a build to suit approach, which is where many small businesses start, a lot of time and effort is spent doing a quote or estimate.  Once the sale is made, all focus goes into delivery.  When the job is finished, you start to work on the next one.  Many times, you are too busy to create the invoice.

Most people might say "generating the invoice is the most important part!".  I always felt that, and was surprised at how many businesses don't do it immediately.  I found, surprisingly that many people are focused on delivering the next job.  They react to business critical items, such as paying their suppliers and their staff (or they can't do new jobs), but are very slow to pay themselves.  They often defer creating the invoice until they "have time".

In analyzing the situation with clients, I found the challenge.  Most of these owners hate paperwork and love doing the work.  They don't work at simplifying the paperwork, because it doesn't come easy to them.  They often create complex processes and tools that makes the job hard to do.  Yet they have done all of the real work, they just haven't made it easy to use.

A common example that I have seen is the generation of quotes or estimates in Excel or Word, the generation of the order form in a different product, purchase orders created manually, then invoicing again using a different tool.  Each of these often requires entry of customer information, product information, prices, etc.  Since there is no link between them, the data is entered multiple times.  In many cases, the same information in the quote is again used in the invoice.  Then the data is entered in the accounting program.  To save time, only the basic accounting entries are entered.

The result is that the business is able to do financial statements at the end of the year (often late), but has no understanding of the profitability of products or customers.

A simplified business process would capture the information once at the beginning, provide the ability to generate order confirmation, purchase orders and invoices simply, as well as save time, give you better information about your business, and get invoices to your customers faster.

Sounds like a winning proposition to me.  Why doesn't everybody do it?