The estimate is an essential step in any contract between a client and a service provider. Although its form is relatively standardised, a well-produced estimate can prove to be a strategic tool for the company. So, how do we optimise estimates to improve provisional invoicing and therefore long-term management?
Centralised estimates for better management
To optimise business management, the first step is to organise the "sales" function of the company accordingly. It is essential to be able to compare similar estimates and retrieve them easily. For example, by adding comments, it makes it possible to understand those that were not signed and why.
Therefore, it is necessary to create a single database containing all estimates, irrespective of the place where they were entered or the person who entered them. By having a single, reliable and regularly updated source of reference, you get a better overview of the sales pipeline.
Above, we mentioned the possibility of making comments about an estimate. To improve understanding and thus the value of the document, it is worth increasing the amount of information provided in it, such as the author, a summary, its profitability, history of actions carried out, a direct link to the shared calendar and associated tasks, emails and mailing history, and finally, tracking of mailings and consultations. A scoring system can be set up to estimate the quality of the offer proposed and the estimated signature.
Provide a reliable signature date
Making the signature of estimates reliable is the second step in improving provisional invoicing. Therefore, it is a good idea to ask your sales teams to provide an estimate of the success of their ongoing proposals. For example, do they have the prospect's BANT (Budget, Authority, Need, Timeline) assigned for the project?
Thanks to experience and shared processes, the sales team will have better information to estimate the date of signing of the contract and thus of the start of the project.
Define (carefully) the date of provisional invoicing
Once the project start date has been estimated as accurately as possible, you can work from assumptions to fix a related date for project deadlines. This gives both a view of the invoicing date for the ongoing project and cash flow in general.
Although customers usually know the date by which they want the project to be completed, the salesperson knows the usual phasing of the projects that they're selling. Of course, these assumptions are not static, they are made to be updated, either by the salesperson or the project manager.
By combining this dual vision, which is both precise and global, you are increasing visibility in the short and medium term, making management more accurate.
However, you need to prove that you are flexible and allow a degree of tolerance with regard to these projections, because they are reasonable assumptions not dates set in stone.