What is the Quote to Cash Process?
The following video explores the "Quote to Cash" process.
Key Takeaways:
The video demonstrates the end-to-end quote process using SAP Cloud components.
The process begins with Solution Order Management, fulfillment of physical goods, project management, and the management of service contracts and field services.
SAP subscription billing, lifecycle of subscriptions, recurring fees, one-time fees, and usage-based fees can be effectively monitored and monetized.
SAP Entitlement Management handles the rights to use services while SAP Convergent Mediation CE standardizes data for billing systems.
SAP S/4HANA manages Solution Billing, Receivables Management, Accounting, and Revenue recognition.
SAP Analytics Cloud fuses analytics and planning into a single solution.
Using Configure Price Quote (CPQ), customer offers can be created and customized with the integration of CPQ as part of the SAP Software development roadmap.
All services are amalgamated through SAP Cloud Integration and SAP Event Mesh for fluid process and event message routing.
The following video explores the "Quote to Cash" process further based on the business use case Printing as a Service:
Here are some key takeaways from the above video:
A solution order can combine sales, service, and subscriptions in one document. In this example, it includes a physical product (printer), installation service, subscription service for maintaining the printer, and backup services after a predefined consumption.
After the solution order creation, order orchestration generates necessary follow-up documents such as the sales order for product delivery and service order for installation.
For subscription service, a rate plan is created to detail recurring fees, allowances for usage (like a number of printed pages), and conditions for additional charges if the usage exceeds the allowance.
The subscription remains in a pending state until all orders are completed, such as delivery and installation. This ensures that the customer isn't billed before the service is activated.
Each stage of the process, like sales order creation, product delivery, and service activation, triggers events that update the status of the other associated orders and subscription.
SAP Cloud Integration Suite plays a vital role in updating real-time statuses of different components of the solution order across different SAP platforms (such as SAP S/4HANA, SAP Subscription Billing) based on the triggered events.
The SAP Entitlement Management tool helps track usage. In this case, the number of printed pages, and triggers backup or maintenance services when the usage reaches a certain threshold (3,650 pages printed).
The one-stop solution offers convenience to customers, improving their experience and increasing efficiency in the entire process, from quotation to using the service.
Now that you understand the quote-to-cash master data creation process, let’s review the end-to-end quote to cash process: printer in use – rating, printer maintenance and invoicing in landscape.
Here are some key takeaways from the above video:
SAP Convergent Mediation is used to collect and evaluate usage data, this could include impressions made on the new printer. Irrelevant data is sieved out and records are aggregated to streamline the rating process.
Usage data is sent to SAP Entitlement Management which oversees the printer's maintenance threshold. Once the threshold is exceeded, an event is created in SAP S/4HANA Cloud service prompting the creation of a new service order for printer maintenance.
Usage data is also directed to SAP Subscription Billing, where it monitors the depletion of the allowed number of printed pages as stipulated in the subscription plan.
The periodic (for example, monthly) bill is generated and consolidated in a pre-bill document in SAP Subscription Billing. This comprises of the ongoing subscription fee and any additional charges incurred for extra printed pages.
At the end of the billing period, this pre-bill document is transferred to SAP S/4HANA Cloud. Here, a single comprehensive invoice is generated combining fees for services, usage, and recurring costs.
SAP S/4HANA then manages the subsequent financial processes, including accounts receivable processing, general ledger reconciliation, and potential debt recovery actions.
In essence, this set-up provides a seamless management and billing process that handles usage monitoring, maintenance alerts, and fee calculations in a consolidated and efficient way.