Financial Controls Start with a Strong CPQ & Deal Desk

The vast majority of B2B organizations that sell to enterprise customers employ a deal desk that involves a configure, price, and quote (CPQ) process. While it’s tempting to view the deal desk as a simple accountability checkpoint between sales, finance, product, and customer success, strategic finance teams are taking a different view. When approached as a cross-functional alignment between the people making a product, the people selling a product, and the people billing a product, finance teams can empower sales success while mitigating risk throughout the quote-to-revenue (QTR) process.

For businesses offering complex revenue models, the deal desk is an even more critical touchpoint to ensure pricing terms defined during the CPQ process align with billing best practices. Subscriptions, usage-based pricing, and bundled products or services create multifaceted recurring revenue contracts. Price breaks, add-ons, and on- and off-ramping terms negotiated during the sales process can add even more complexity to contract and billing terms. This makes the deal desk even more integral in creating quotes with financial structures that require no reconfiguration or rebooking when finance teams are closing the books monthly or annually.

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Refining your deal desk to keep the CPQ process on financial track

There are many places where deals can get tricky from a financial perspective. When run strategically, the deal desk keeps every team’s interests coordinated and the CPQ process moving. Here’s how a thoughtful deal desk can set your finance team up for success.

Establishing financial controls

Creating financial controls at the quote or order-entry stage is mandatory to maintaining compliance and avoiding revenue recognition headaches down the line. Building clear guardrails into the CPQ process can help you anticipate what will happen later on in your revenue pipeline.  This looks like:
  • Establishing clear rules for discounting.
  • Setting up revenue schedules for charges that are billed over time.
  • Identifying revenue events that alter your revenue schedule and distribution.

Planning ahead for complexity

Most B2B businesses generate revenue through bespoke contracts as well as upsells. But these introduce complexity in determining SSP allocations and performance obligations, especially if they require canceling and restarting a contract each time a customer makes a change. Establishing steps within the CPQ process to address both the immediate deal terms as well as the long-term engagement empowers your sales team to pursue a wider range of revenue opportunities, and secure more revenue more easily over the lifetime of a contract — because you’ve planned ahead to accommodate future billing complexities.

Quoting with Precision and Control

Many CPQ processes and platforms are built to help sales teams create quotes and get deals done as quickly as possible. While this is efficient for the sales side of the house, it can make things messy for finance if the CPQ process doesn’t reflect what’s possible from a revenue recognition standpoint. The deal desk helps you make sure that sales quotes can actually be sold and billed without a huge amount of manual revenue recognition work.

Why the deal desk is a strategic necessity

Your deal desk is the key to creating a smart CPQ process at every stage and for every stakeholder. Getting deals set up correctly from the start provides better visibility into net revenue and less friction when it comes to billing and collection. Treating your deal desk as a strategic investment not only has a multitude of benefits for your revenue and billing teams — it also can mitigate compliance risk during corporate audits and security evaluations.

Financial transparency

As the bridge between sales and revenue, finance has to balance the needs of regulatory compliance and accounting efficiency with being a creative partner to help sales close new deals. During the deal desk, your finance team can answer questions about discounts, bundles, one-time fees, and the impacts of these pricing levers on revenue recognition. Having upstream visibility into what is being sold, to which companies, for what price, can provide greater transparency into what’s coming so finance can weigh considerations connected to running a business that are independent from any individual deal.

Having a function that can run with a deal’s needs while projecting where things are going to end up is important for finance. It gives the team predictability so they can set expectations and projections with investor analysts based on what they’re seeing from the sales side of the business.

Reduced compliance risk

The more financial complexities are introduced during the quote stage, the greater the risk of potential compliance issues. This is particularly an issue if your deal desk uses a CPQ system that’s connected to your customer relationship management (CRM) platform, but not your revenue systems. When CPQ and rev rec systems are siloed, it can be difficult for finance teams to understand a deal’s revenue impact — even on the billing side of the pure consumption models — which can open you up to compliance risk. You need to have a fully-connected stack to maintain SEC compliance while allowing for deal flexibility and creativity.

Flexible CPQ technology: A game-changer for deal desks

Each unique deal requires unique configuration. Having a flexible CPQ platform that’s easy to configure and also connected to your revenue systems is a critical input to a high-impact deal desk.

Introduce financial controls upstream

Most CPQ platforms aren’t set up to handle complex enterprise pricing and billing terms — which can keep your deal desk process from giving your finance team what it needs to recognize revenue efficiently. Diverse, long-term revenue strategies require more than a one-size-fits-all approach, and a quote-based deal view isn’t built to allow nimble responses to deal details. Many platforms base their metrics around speed of quoting and how quickly they can accelerate a sales pipeline. As a result, customers can customize a quote however they want, but there are no guardrails in place for things like how you’re allocating your revenue, how you’re going to bill over a certain period of time, how you’re going to renew, how you’re going to make changes over the course of a customer lifecycle. Offering a limitless menu of options might be good for customers, but it isn’t good for finance teams. A CPQ platform with financial controls built in gives sales the flexibility to create quotes that make sense from a revenue recognition perspective while also supporting customer needs.

Automate complex QTR processes

Building quotes for something like pay-as-you-go pricing gets complicated quickly. Without built-in support for this kind of pricing model, finance teams must build manual workarounds, which increases the potential for accounting errors. A configurable CPQ platform allows finance teams to model revenue projections upstream, set up a performance obligation against these projections, establish billing terms, and then trigger the process run automatically once the deal is closed. This automated QTR process frees up finance teams to work on moving forward critical business initiatives instead of cleaning up inconsistencies or  that require constant back-end support.

Minimize manual accounting work

Without upfront structures to keep your CPQ process aligned with your rev rec strategy, accounting will become more labor intensive than it has to be. Building controls into your CPQ platform from the beginning can save your business time and money. If you don’t have safeguards in place, things get tangled down the line in finance. The way companies solve for this is by paying millions in fees to have an auditor look through the ad hoc things that happened over the course of the deal because they lacked the proper controls at the beginning.

Reframe the deal desk conversation

Generating revenue through custom contracts and sophisticated revenue models introduces financial complexity — but also sales opportunity. With a strategic approach to your deal desk process, supported by an end-to-end QTR platform that gives sales teams flexibility without causing revenue recognition issues, your finance team can help your sales team win new business without compromising compliance.

Looking for a CPQ and billing solution that’s purpose-built for quoting and billing any combination of subscriptions, products, and services? Zuora CPQ and Zuora Billing can help your finance team streamline billing operations, automate revenue recognition, and keep your finance and revenue teams connected throughout the sales and billing cycle.

Best Practices in Financial Controls


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