When most people think about putting together quotes for customers, they visualize the actual customer-facing document that they hope the customer will ultimately sign off on. Although that is one important purpose of a properly created quote, there are actually several other crucial quoting considerations that are often misunderstood or under leveraged.
Many organizations rely on a spreadsheet-based quoting process. The challenge with this approach is that there are few, if any, controls in place to validate that the spreadsheet-based quotes are based on accurate parts lists and pricing. These misunderstandings can lead to:
- Lower than expected margins resulting from quoting errors
- Dirty hand-offs between sales and order fulfillment based on invalid configurations
- Repeated quoting mistakes
- Inaccurate sales funnel
What’s Wrong with Spreadsheet-Based Quoting? Sales Team Quotes Challenges and Solutions…
Eliminate quoting errors by linking to an up-to-date master parts list with accurate pricing
The first problem with spreadsheet-based quoting is that the parts, services and support items in the quote are not linked to a master parts list. So, pricing and configurations quickly become out-of-date. This results in sales team quotes being submitting based on incorrect margins and\or configurations. This often leads to order fulfillment fire drills, wasted technician time on site, and missed customer deadlines.
The Solution: Sales quotation software that links directly to a master parts catalogue will ensure that any items in the quote are based on the latest parts list and pricing. The sales quote software will give the sales person several formatting options (print a bulk price, hide model numbers, etc.) in order to control the “presentation layer” to the customer, but with all the dollar figures based on an accurate maser parts and labor list in the background. This ensures accurate margins and configurations. The best quote software will also allow for approval thresholds for both quoted margins and total dollar value.
Stop dirty hand-offs between sales and order fulfillment by linking the quoted dollars for products directly to the BOM and services directly to the labor estimate the quote is based on
Another problem with spreadsheet-based quoting is that the detailed Bill of Materials (BOM) and labor estimate (that a quote is based on) often become disconnected from the quoted dollar figures being presented to the customer. This is even more common after 3 or 4 quote revisions. This often results in the dreaded “Where did these numbers come from ?!?” feedback from the project delivery team as sales hands them a new customer approved quote.
The Solution: Sales quotation software allows direct linking of the quoted dollars for product, services and support to the supporting BOM and labor estimate. The sales person would also have formatting options (bulk price, hide model numbers, etc.) in order to control the “presentation layer” to the customer. But the best part is that this link would be preserved through multiple quote versions so that each quote version would actually be based on its own unique BOM and labor estimate. This ensures that no matter which quote version the customer goes with, it’s always based on the correct corresponding BOM and labor estimate for fulfillment purposes. This makes for cleaner hand offs between sales and order fulfillment, resulting in more efficient deployments and happier customers.
Eradicate repeated quoting mistakes by linking to project actuals
Another issue with spreadsheet-based quoting is that it’s very difficult to cycle implementation lessons learned back into the quoting process because it’s a manual process to reconcile detailed quoted estimates with project actuals. This often results in significant differences between planned and actual margins that keep happening again and again without the team recognizing patterns and correcting the problem to eliminate future quoting mistakes.
The Solution: Sales quotation software can pass the materials and labor estimates directly to project management and job costing which allows project managers to easily cycle implementation lessons learned back into the quoting process.
This not only allows the organization to significantly reduce under quoting, it also identifies areas where they are over quoting, providing guidance to the sales team where they can be even more aggressive on pricing at acceptable margins in order to win more business.
Inaccurate sales funnel fixed by linking quotes directly to sales forecast
The fourth problem with spreadsheet-based quoting is that it’s very manual and time consuming to roll-up individual sales reps forecasts into one master sales funnel spreadsheet and to keep the CRM/opportunity management software up-to-date. Because it’s updated manually, it’s immediately out-of-date as soon as the the very next quote revision or new customer quote goes out. This makes it very hard for management to be able to rely on the sales funnel for accurate revenue, margin and resource forecasting so they can make informed growth investment decisions.
The Solution: Sales quotation software can link quotes directly to the sales funnel forecast. That means every time a new quote or quote revision goes out, the sales funnel (revenue, margin, and resources) automatically gets updated in real time. This results in less administration overhead for the sales team, more accurate forecasting information for management decisions, and more planning runway for resource planning. The best quoting software can slice and dice the forecast not just by rep by opportunity, but also by manufacturer, customer, or line of business which makes the sales forecast even more useful for growth decisions.
Spreadsheet-Based Quoting is Hurting Your Business’ Growth Trajectory
Many sales people love spreadsheet-based quoting because it’s fast, easy and has very few constraints. It’s the rest of the organization that often suffers from the headaches resulting from the lack of visibility or audit trails endemic to spreadsheet-based quoting, which ultimately may negatively impact your organizations growth plans.
If this sounds like your organization, it may be time to investigate sales quotation software or CRM and quotation management software. These solutions can help you reduce quoting errors, streamline order fulfillment, stop your organization from repeating past quoting mistakes and get better visibility into an accurate sales funnel.
Find out which is the best PSA software that will improve your quoting process. Download the PSA Software Buyers Guide Now.
