Describing the Lead to Cash Business Process


After completing this lesson, you will be able to:

  • Describe the lead to cash business process

The Lead to Cash Business Process

SAP Lead to Cash Intelligent Enterprise

The Order to Cash Process in Sales and Distribution focuses on what happens directly in SAP S/4HANA.

A sales order is an electronic document that captures and records your customer's request for goods or services. The sales order contains all or the information required to process the customer's request throughout the whole process cycle.

Shipping processing in Sales and Distribution begins when you create the delivery document. Creating a delivery document includes copying information from the sales order, such as the materials and quantities, to the delivery document. The delivery document controls, supports, and monitors numerous subprocesses for shipping processing, such as the following:

  • Picking

  • Posting the goods issue

The posting of the goods issue can bring about a change based on a quantity basis, as well as on a value basis in stock. Changes based on a value basis are made on the relevant balance sheet accounts in financial accounting.

Creating a billing document includes copying information from the sales order and the delivery document onto the billing document. As a result, delivery items and order items (for example, services) can be models for the billing document. The billing document is the sales and distribution document that acts as the basis for creating invoices. The billing document also serves as a data source for financial accounting to help you to monitor and process customer payments. When you create a billing document, the G/L accounts are normally determined automatically and the relevant data is posted.

The incoming payment closes the Sales and Distribution Process. It is part of the Financial Accounting application module.

The SAP Customer Experience covers a variety of areas; specifically Sales, Service, Marketing, and Analytics. Transaction and experience data is used to create higher order success rates and increased customer satisfaction.

Integration with SAP S/4HANA is supported for sales and service activities.

The Lead-to-Cash process connects a customer’s interest to buy (SAP Customer Experience) to a company’s realization of revenue (SAP S/4HANA), integrating the front office to the digital core in order to deliver consistent, end-to-end customer experiences.

Key Concepts:

  • The customer at the center of everything

  • End-to-end process with a single data model

  • To be effective with intelligence and integration

We use experience data to help make decisions.

For example, we may know that when shopping on our webshop, customers often place items in their shopping cart, but later remove them and do not complete the purchase. Perhaps we do not know why this is happening, so may wish to employ a use case to ask customers why they have removed items. It may be to do with price, or they may just have identified a more appealing product while shopping.

The Lead to Cash process can be split into five distinct phases, each phase named based on the step it is coming from and the step it is going to:

Contact to Lead

The process begins with a marketing specialist wishing to generate leads for sales, perhaps for a new product or range of products. This could be a marketing campaign aimed at new customers or perhaps focusing on existing loyal customers. Whatever the details, the goal is to stimulate customer interest. If the result is sufficient customer engagement and interaction, this is captured, scored and a marketing lead is created.

Lead to Opportunity

A sales representative or account manager may assess whether to pursue or drop the lead. Analytics tools or even renewed direct contact with the potential customer may contribute to this decision. If worth pursuing, the lead is converted to an opportunity.

Opportunity to Quote

The sales representative assesses whether the opportunity is ready for a formal quote. Alternatively, in a self-service scenario, the customer may themselves request a quotation online.

Quote to Order

The quotation is created with the appropriate mix of products, is priced and presented to customer, either on the website or via email or printed output. The quote may be reworked following customer feedback but, once the customer is in agreement, an order is created.

Order to Cash

The order is now fulfilled. Physical products are dispatched and delivered, while service products are scheduled and performed. The customer may confirm product and service delivery as these are completed. Finally, the customer is billed.

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