In 2000, when he was the Corporate Vice President of Credit and Customer Finance at Sony Pictures Entertainment, Bob Shultz selected DataServ’s Quote to Cash (Q2C) Software as a Service (SaaS) solution to automate and streamline Sony’s Q2C process. In 2014, the DataServ solution that Bob implemented 14 years earlier won the Institute of Financial Operations’ Accounts Receivable Innovation Award. Bob has since moved on to run his own consulting business, Quote to Cash Solutions,  and he is currently renowned as one of the top Q2C consultants in the United States. With that in mind, we thought we would take advantage of Bob’s knowledge and experience and offer his 10 Q2C best practices. They are as follows: 

  1. Credit Management must be involved at the quote development stage when pricing and terms of sale are structured – It all starts with how deals are made between the company and its customers. Deals that involve extended terms or complex pricing, discount, or rebate policies have an impact on cash flow and may be difficult or costly to administer. Special arrangements are often not communicated to areas that have to deliver what has been promised. If a company’s systems and processes are weak, the result can be inefficient, manual and error-prone workarounds.
  2. Focus on the “real” concerns identified in a credit review – Any company granting trade credit is a slave to two masters: One is slow payment increasing the cost of funds and lost working capital opportunity, and the other is the risk of non-payment. The first critical step is to implement an integrated credit policy signed off by senior management. This will encourage consistent adherence and effectiveness. The policy must address both the company’s need to generate revenue and the level of risk necessary to remain competitive and meet financial objectives. It cannot be developed in a vacuum. Stakeholders from all functions should participate in the creation and buy off on the end result.
  3. An effective credit hold is no secret – The credit-hold process should be well communicated within the organization. The extent to which customers are given advance notice, and the degree to which salespeople are used for collection, varies between industries. It is critical, however, for sales to know a credit hold is being imposed. This should be communicated as far in advance as the situation allows. At the end of the day a credit hold is a collection tool and can reduce bad debt exposure.
  4. Order Management: Accuracy, visibility and timeliness are key – Order management must be accurate and integrate with company pricing, terms and credit policies. This is where administrative discrepancies begin. Poor order management practices have an increasing downstream impact as companies migrate to electronic forms of order, invoicing and payment. As transaction volumes increase, problems reach a new level of complexity and financial impact.
  5. Billing/Invoicing......“It’s in the format and timing” – Customer billing today is done both by traditional hard copy invoices mailed or emailed to the customer and increasingly by electronic means or self-service for customers on a company portal. As billing is converted to an electronic format (EDI, ACH, Wire, etc.) it is essential for both parties to do thorough up-front work. This will ensure both the buyer and seller’s system communicate accurately. A Q2C automation solution can provide instant electronic access to all the essential documents (invoice, proof of delivery, and packing slip) that are a part of the collection process. This helps to easily and quickly resolve collection issues.
  6. Customer Service…. “Prioritize ‘customer facing’ processes and events” – The customer relationship is a critical component of cash flow and risk management. People, not technology, ultimately handle exceptions, respond to questions, and go the extra mile when asked.
  7. Organize sales, customer service, collection, dispute reconciliation and cash application teams with common customer assignments – Assign people in each functional area as specialists for specific customers, types of customers or customers within particular regions. Align work assignments so that all steps of the Q2C process for a customer are handled by a consistent cross-functional team. When an issue comes up, each functional area will be familiar with the customer and problems will be resolved efficiently. The aim is to provide one face to the customer no matter the issue.
  8. Cash Management and Application – Utilize lockbox arrangements and keep up with customer remittance policies. In spite of technology advances a high percentage of payments are still made by check. The best defense against today’s sophisticated disbursement tactics are strategically located lockboxes. Mail float delay is a factor in cash flow for both the buyer and seller. By understanding where payments are coming from, the creditor can establish banking arrangements to minimize mail float and get checks on deposit faster.
  9. Collections and Dispute Resolution… “Collections is not an accounting function” – Many companies mistakenly consider collections just another accounting function. They do not understand the fundamental differences. Properly run, collections is part of the basic business process of the company. It impacts customer relationships, revenue opportunity and identification of risks.
  10. If you can’t measure and report it, how can you manage it? – Establish metrics that define success in collections and dispute resolution. Keep in mind that everyone within the Q2C process should have skin in the game. This includes sales, operations and customer service as well as the finance functions. 

You can contact Bob with questions or inquire about his comprehensive management services by visiting his website here. If you are interested in automating your Q2C process, you can learn more about DataServ’s Software as a Service (SaaS) Q2C automation solution here. Feel free to contact us at with any questions you may have.

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