In this series, experts from Nue challenge some of the most prevalent myths about the billing process. Moving past these myths will make work easier, more efficient, and more effective for teams across the entire go-to-market motion. 

Imagine two coworkers spend their workdays in two neighboring cubicles, doing two parts of the same assignment. Yet they never leave their cubicles, so they don’t see each other or talk to each other directly. 

The first coworker speaks only Spanish, and the second speaks only Chinese. A third person, who is trained as a translator, takes what the first coworker writes in Spanish and rewrites it in Chinese. The translator then drops the note onto the Chinese-speaking worker’s desk. 

That sounds pretty inefficient, right? But that’s what happens every day when post-sales and finance teams receive sales orders from sales to translate to invoices. 

Many companies view billing technology as an invoicing tool, and look to the finance team to maintain it. But unless you want finance to be tied up in error-prone busywork, you need to think about billing as part of a larger process. In fact, you should be thinking about billing much earlier, during the sales process.

“Unless you want finance to be tied up in error-prone busywork, you need to think about billing as part of a larger process.”

If there’s poor coordination and no integration between billing software and the sales team’s CPQ tooling (which is typically the case), your efficiency takes a hit. It’s almost as bad as relying on coworkers who can’t see each other or speak the same language. 

Most companies approach CPQ and billing with the assumption they are two separate things. CPQ is the responsibility of sales, and its primary goal is standardizing sales processes and pricing in hopes of creating velocity. Its job is over once it relays a selected quote that turns into a signed order form from the customer to finance. In turn, billing tech is the responsibility of finance, and its primary role is invoicing. Billing only comes into play once finance receives a signed sales order from the sales team. 

“Most companies treat CPQ and billing with the assumption they are two separate things.”

This separation isn’t hard to understand at a psychological level. Sales teams and finance teams want to have clear project ownership and something they can call their own. (It’s a bit like why many prefer cubicles to open desks.) 

But if sales and finance set up CPQ and billing in parallel, they don’t come together harmoniously — and this requires calling on more people to help bridge the gap. What exactly causes such a rift between two systems that should, in theory, be working towards the same goal?

1. Hybrid Product and Pricing Configuration 

CPQ and billing solutions usually employ distinct pricing paradigms and calculations, so what CPQ tools output is not the input that billing tools need. This means they “speak different languages” (or at least different dialects of the same language), requiring manual assistance to “translate.” In practice, the translator ends up being the financial operations team. That team has to review the quote/sales order that CPQ generates, and then create matching orders and invoices in the billing or ERP system — each with its own pricing catalog of SKUs. 

“What CPQ tools output is not the input that billing tools need.”

This has become exceptionally difficult with the advent of hybrid pricing combinations — including (but not limited to) subscriptions, services, consumption-based models like credit burndown and usage overage, and physical goods like hardware. 

And this isn’t a small inconvenience. For large companies with inefficient systems, it can be a massive resource drain. To give a sense of how laborious this process can be, there’s an entire industry based around outsourcing this process to massive external “order management” teams. 

2. Expansion Pricing Changes

Gone are the days of static deals. Mid-term upsells or cross-sells are increasingly common and important — yet it’s still quite common to manually edit them into an invoice. Each customer now has a unique “lifecycle” when it comes to increasing revenue. This task alone demands a large order management team — and whether RevOps and finance teams outsource this or build a large in-house team, it’s a major spend.

3. Hybrid Product and Pricing Offerings

To make matters worse, there’s a rift between different kinds of billing. Why? Because different kinds of sales motions have distinct billing systems. For example, self service product-led and sales-led enterprise purchasing usually don’t have a single unified billing tool that takes quotes from both as input. Cobbling together the invoices from two or more systems to create a “true invoice” is clunky, at best.

The end result of these challenges? The invoice equivalent of Frankenstein’s monster — something that took a lot of time and effort to cobble together, but is not reliable or particularly presentable. If this were an unavoidable problem — and many think it is — then it would make sense to buckle down and accept it as a way of life. But it’s not inevitable, and shouldn’t be seen as such. 

“The end result of these challenges? The invoice equivalent of Frankenstein’s monster.”

Sales, post-sales, and finance teams all need to come to the same conclusion: Billing is not a disconnected function. It should be able to generate an invoice as soon as sales closes a deal, and make alterations as soon as sales finalizes them with the customer. 

Even the companies that understand this aren’t always able to make things better, because sales and finance are different cultures with distinct preferences. Finance wants to dive deep into stats, but sales wants something that is easy and quick to use. This means number-crunching, detail-laden billing software doesn’t translate well into the speed- and simplicity-oriented tools the sales team uses. And the same goes for CPQ software — it’s generally not detailed or dynamic enough for finance’s taste.

Moving beyond the belief that “billing begins in finance” requires something that has only recently become possible: a connected quoting and revenue lifecycle management system that enables changes, upsells, and renewals for the go-to-market team, along with the ability to preview invoices. Such a system focuses on the end-to-end revenue lifecycle that can provide sales and post-sales teams with simplicity while giving finance teams the details they need. 

“Moving beyond the belief that ‘billing begins in finance’ requires something that has only recently become possible."

Bringing together CPQ and billing this way can result in something greater than the sum of its parts. On top of eliminating the need for large dedicated order management teams, the sales team can gain access to new revenue expansion capabilities to better control the customer lifecycle. These new functions include the ability to:

• Instantly generate invoices that unify every sales motion at play. This is a tremendous effort, cost, and time-saver, especially as complex hybrid pricing models become more common.
• Truly manage the customer’s lifecycle with real-time invoice billing flow and updates for cross-sells, upsells, and cancellations, with automated co-terming to streamline invoice alterations.
  
• Coordinate between sales and finance to ensure that quotes can be quickly turned into invoices. This will give the sales team more confidence to create custom discounts or alterations as needed to maintain customer loyalty. 
  
• Achieve a robust quote-to-revenue workflow by implementing just one system, rather than two or more, making the RevOps team’s job more straightforward.
  

It’s worth taking the time to learn about what modern CPQ, lifecycle management,and billing can offer — because the ability to handle the entire revenue lifecycle from a single platform brings benefits for sales, finance, and customers alike. 

And, in case your office happens to look like the world’s least efficient office, encourage the cubicle-bound workers to stretch their legs and meet each other. And make sure they have the chance to learn each other’s language over time. You might be surprised at how well they get along.