Sales Quote Validity – Verify expired quotes before they become orders
You’re excited that you got the order, but the problem is the quote expired two months ago. What do you do? This is a challenge facing countless businesses. In many cases, the business takes the order, only to find out later they didn’t make the expected margin or even worse, lost money on the deal.
For businesses that sell products made of price sensitive materials and components that can change monthly or even daily, it’s essential that pricing for any accepted quote is still valid. What can make the situation more challenging are exchange rates that vary over time. By catching expired quotes before they become orders, businesses can avoid costly errors and help ensure that acceptable margins are maintained. A business doing 20 million in sales with as little as half a percent (0.5%) margin degradation on expired quotes can lead to tens of thousands of dollars in lost profit.
If you are using Excel & Word as your primary quoting tools, it can be difficult to catch expired quotes before they become orders. Who wants to take the time, to first find the original excel sheet and then do an analysis on whether the profit margin is still acceptable? More likely, the business processes the order and hopes for the best. Not ideal!
Here’s how a robust sales quoting solution can help resolve this problem.
First, a good sales quoting solution gets everyone organized and collaborating to service the customer. Every sales rep, customer service staff, manager, and pricing and costing administrator has access to the same shared database. As soon as a new cost is updated, everyone has access. Next, when an order is received, the original quote is just a few clicks away. There is no searching, calling or emailing to find the original quote and verifying that the PO matches the order. If the quote has expired, inside staff know immediately and can decide on the validity of the quote.
In the case of an expired quote, a sales quoting application can easily flag the quote as expired. Once it’s flagged as expired, the business has a few options:
- First an expired quote can be locked until revised
- On revision, costing can be immediately updated from the database
- Upon update, if the margin falls below an acceptable threshold, an automatic approval process can kick-in or the sales rep can adjust pricing to get back to required profit levels
Now, lets get back to the order that is based on a quote that expired by two months. With a good integrated quoting system, the quote is already flagged as expired. The staff receiving the order can quickly identify that the quote is out of date and do a pricing analysis to see if the costing and margins are still valid. If not, the order can be sidelined for review. This can all happen in a just few seconds.
With an Excel quoting approach, files are typically spread across the sales team and a business may not realize that a quote has expired. With a well-designed sales quoting solution, quote validity is an inherent part of the application and ensures orders match a valid quote. If the quote is out-of-date, then workflow procedures can start to ensure appropriate oversight.
A quoting tool built around a centralized database can help ensure quotes remain valid. Integrating the quoting solution to an ERP system where updates made in one program, automatically cross over provide a whole other level of productive gains and cost efficiencies.
Accepting expired quotes as orders can have a negative impact on a business’s bottom line. Implementing an effective quote to order solution can help avoid costly mistakes, ensure quote validity and maximize margins. Customers may not like to hear that the expired price is no longer valid, and a business may decide to hold the price, but at least with a sales quoting tool, you have the opportunity to make an informed decision.
With extensive experience helping businesses implement sales quoting solutions, we believe every project should help you simplify work, enhance customer service and accelerate sales growth. To learn how your business can implement a robust sales quoting solution, feel free to contact us at ProQuoteInfo@ProQuote-Solutions.com or call 905-403-1198.