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  • Joe Paz

What is a Lead-to-cash process?

Updated: Nov 10, 2019

Lead to cash is the main and most important business process for the majority of commercial companies.

Generally speaking, Lead-to-cash is made of two major sub-processes: Lead-to-Order, where the pre-sales steps are committed. Typically this will include acquiring of a lead, identifying opportunities, offering and quoting until winning (hopefully). Then, a sales order can be issued based on the winning offer/quote.

The second sub-process is the Order-to-Cash (sometimes referred as Order-to-Fulfill), where the actual logistics (followed by financial) steps are taken in order to provide the service or goods to the customer and receive payment for them.

As it comes to IT solution, the way and the "right" application to manage each stage of the process vary between each organization, depends on one or more reasons:

· Habits and acquaintance with specific applications. For example- Sales persons who are used to work in Salesforce will prefer to manage all or most of the process within Salesforce, rather than in the ERP or in another CRM.

· Flexibility of the applications. Organizations with internal IT skills will prefer in many cases to put the major part of the process in the platform they can customize and adjust to the specific demands of the company.

· Other reasons / consideration might be the price of licensing; the level of support given to each platform and sometimes it just depends on the implementing company or person- in which application they are better skilled; which is easier to maintain; which is more profitable, etc.

Another known approach claims "best of breed" which means to use the more suitable apps or the best one for its niche. In Lead-to-cash this will mean managing all pre-sales stages (Lead-to-Order) within a dedicated CRM (Customer Relationship management) which gives the the agility to build a specific flow and interface to support the organization sales approach (i.e. connectivity with telephony system, supporting social networks and media, working by regions, managing sales commissions, etc.).

The Order-to-cash will be typically managed within an ERP solution which can manage efficiently the process including: inventory management and available-to-promise, production, resource management, delivery and transportation, etc.

The challenge is to combine and integrate these to platforms into one seamless flowing process. Once the approach is the best-of-breed or alike, the decoupling point (where one ends and another starts) between the applications is clear. This enable a simpler and more logic interface with less data duplication and less data move forth and back between the applications.

Typically a process like that will have this form: Leads and opportunity are managed in CRM. Only winning opportunities (or quotes) in the CRM will become (as soon as they declared "won") Sales orders in the ERP platform, where the sales execution is done until delivery and collecting the money.


#ERP #CRM #Salesforce #Lead_to_order #Order_to_cash

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