October 3 by John Banks
In my many years interacting with a lot of finance departments, I’ve found that they usually fall on one of two ends of a spectrum:
- The first sees billing and invoicing as really easy – we’re not worried about it
- At the other end however, billing is a tremendous struggle
So, why is the spectrum so wide? To answer that, let’s look at what makes billing management difficult.
Complexity 1 Pricing and Packaging:
When you sell a single product with a simple price, there tends to be less pricing complexity. Sure there are volume discounts, etc., but the core of pricing is focused on the good old fashioned Supply-Demand curve where you are trying to maximize Price and Quantity.
As your pricing rules get more complex however, so does the billing. There is no getting around it. Every pricing permutation has a compounding affect. Simply adding a separate SKU/Item for every permutation results in an unmanageable SKU explosion.
Complexity 2 Agreement Order Process:
Orders are foundational to Quote-to-Cash business processes as they drive fulfillment, invoicing and revenue recognition. The Order is a billable event and represents a point in time transaction. The challenge is the true meaning of an Order is actually only known in context of the Agreement or Contract.
The Agreement is where you define the obligations, terms, commitments. It also provides the full context needed for billing especially as the agreement can define pricing commitments, true ups, and incentives based on committed volumes.
Complexity 3 Invoicing:
Point blank invoicing can be really hard. The Invoice is the result of all of those orders, pricing complexities and agreement changes, all wrapped up in a tidy document with lots of math, rounding, local business rules and taxes.When Billing is a black box job that runs once a month, things tend to get lost in translation as you implement price uplifts, ramp pricing, staggered activations, all the things you actually have to do in order to deliver your service and price to the value you want to drive.
The underlying cause of these three of these complexities is a gap between your ERP system and billing process. The result is all of your data and rules are housed in separate silos which means multiple billing systems, manual steps, latency between data, and disjointed processes. In fact, it’s not uncommon for large enterprises to have up to 30 different billing systems between its hardware side of the house, fulfillment services, e-commerce and the front end customer relationship data. There simply isn’t a singular view for all of these rules and data, making it very difficult for finance to manage.
This becomes a tremendous operational burden because the finance team has to do forensics to understand the deal and translate to orders without understanding full context of pricing, the agreement, the relationship.
By automating your billing management system within the Salesforce1 platform, you can maintain all of your rules in one accessible location, providing uncanny visibility and control, not just into your billing and revenue management, but renewals, rebates, contracts and quotes. You can finally streamline the entire payment and invoicing lifecycle that occur after customers have placed.
If you are attending Dreamforce this year, be sure to attend the session “3 Steps to Stop the Family Feud! Advanced Billing for Sales Ops and Finance” on October 14. Use the Schedule Builder to reserve your spot before it sells out.