In the hustle and bustle of sales, ever found yourself on the verge of closing a deal, only to hit an unexpected roadblock? It happens to the best of us. That's where the often overlooked but critical process of sales approvals swoops in. Think of it as the checkpoints in your sales journey, ensuring that every deal aligns with the rules of the road.
I'm here to guide you through the ins and outs of this process, helping you understand why it matters and how it can be your secret weapon in securing deals that not only benefit your bottom line but also keep your business cruising smoothly.
What is a sales approval workflow?
A sales approval workflow is a meticulously designed process that serves as a gatekeeper for critical sales-related actions. Its primary purpose is to ensure proper authorization, prevent unauthorized deals, and maintain consistency.
Sales approvals play a vital role in the sales cycle by serving as a crucial checkpoint. Through careful examination, they help mitigate risks and enhance the overall efficiency and success of the sales process. Functioning as a strategic guide, sales approvals direct the team toward overarching strategic objectives, ensuring that each deal contributes meaningfully to the company's overall success.
Let’s understand the key components of a sales approval workflow:
- Proposal submission: The journey begins with a well-prepared proposal. This document sets the stage for the entire approval process, delving into product specifics, terms, and conditions.
- Internal review: The proposal undergoes a thorough examination by finance, legal, and product management. This ensures a comprehensive assessment of feasibility, legal compliance, and alignment with company standards.
- Approval levels: Approval levels vary based on the deal's size. Smaller deals may navigate managerial approval, while larger ones require scrutiny from senior management, emphasizing proportional assessment and strategic importance.
- Compliance check: Legal and compliance teams play a crucial role in ensuring the deal aligns with regulations, mitigating the risk of legal complications. This step is pivotal for maintaining a compliant sales strategy.
- Financial approval: Finance scrutinizes pricing, payment terms, and the overall financial impact. This ensures that each deal aligns with the company's financial goals, maintaining fiscal responsibility.
- Strategic alignment: Senior management assesses whether the proposed deal aligns with the company's broader strategic goals. This ensures that every deal contributes meaningfully to the company's overarching success.
Types of sales approval workflows
Each type of sales approval workflow serves a distinct purpose, ensuring streamlined, compliant, and successful sales processes. From managing discounts, billing, legal compliance, lead progression, quotations, to invoices, structured workflows maintain control and efficiency in the sales cycle.
Let’s take a look at the different types of Sales Approval Workflows:
1. Discount approval workflows
We touched upon discount approval workflow briefly in the last section as it is one of the common workflow types. The process initiates with the submission of detailed discount requests by sales personnel. These requests undergo a meticulous internal review, where an assessment is made regarding the feasibility and potential impact of the proposed discounts. Depending on the magnitude of the discount, the request progresses through various approval levels, involving different managerial tiers. The final step involves obtaining authorization for the approved discount to be applied in the sales transaction.
2. Billing approval workflows
Billing approval workflows commence with the submission of detailed billing information. This information undergoes internal scrutiny to ensure accuracy and adherence to established pricing structures. Approval is granted based on predefined billing policies and standards. The final stage involves obtaining authorization for the billing process, ensuring that invoices are accurate and compliant with the company's billing standards.
3. Legal or compliance approval workflows
Legal or compliance approval workflows start with the submission of sales activities for thorough review by legal and compliance teams. The review assesses the adherence of the proposed activities to existing regulations. If necessary, adjustments are made to align with legal requirements, and approvals are sought. The final stage involves obtaining authorization for the sales activities, ensuring legal compliance.
4. Lead management workflows
Lead management workflows kick off with the submission of new leads for assessment and potential inclusion in the sales pipeline. An internal team reviews the leads for relevance and potential conversion. Leads progress through predefined qualification stages based on established criteria. Approved leads move forward for additional actions, such as assigning them to specific sales representatives. The final disposition of leads is determined, either advancing in the sales process or concluding as unqualified.
5. Sales quotation workflows
Sales quotation workflows begin with the submission of detailed quotations by sales teams, outlining products, services, and terms. An internal review ensures the accuracy and completeness of the quotation, followed by an evaluation of the pricing structure for competitiveness and profitability. Approval levels vary based on the complexity of the quotation, and the final step involves obtaining approval before presenting the quotation to customers.
6. Sales invoice workflows
Sales invoice workflows commence with the submission of sales invoices for internal processing. An internal review ensures the accuracy of billing details and adherence to policies. The services or products listed on the invoice are verified for accuracy. Approval is sought based on predefined payment terms and conditions. The final stage involves obtaining authorization for the sales invoice before issuing it to the customer.
Best practices for sales approval workflows
I cannot stress enough how important it is to lay down the best practices when setting up anything in your business. It serves as a guidebook on how to move forward and provides you with a foundation to work on.
The following are the ones that I’ve learned in my years in business and sales. Implementing these best practices ensures that your sales approval workflows are not only efficient and reliable but also adaptable to the dynamic nature of sales processes. Let’s dive in —
1. Automating approval process
Automation in the approval process means leveraging technology to streamline and expedite decision-making. It involves replacing manual, time-consuming tasks with automated workflows that ensure quick and accurate approvals. By automating sales approval processes, businesses can address delays caused by manual handling, reduce the risk of miscommunication, and eliminate bottlenecks that often occur in complex approval hierarchies.
We've developed Luru to automate the sales approval process by reducing the time taken for decision-making, thereby accelerating deal closures. With Luru, businesses can ensure that their sales approval workflows are not just automated but optimized for peak performance, aligning perfectly with the ever-evolving nature of sales processes.
2. Clear roles and responsibilities
Clarity in roles and responsibilities is akin to assigning specific roles in a project team. Just as project managers, designers, and developers have distinct responsibilities, define the roles of salespeople, managers, legal teams, and finance in the sales approval process. For instance, salespeople focus on proposal preparation, managers on reviews, and legal teams on compliance checks. This ensures a collaborative and well-organized workflow.
3. Permissions and hierarchy
Think of permissions and hierarchy as controlling access to different floors in a building. Just as certain employees have access to specific floors based on their roles, align approval levels with your organizational hierarchy. For example, junior managers may handle smaller deals, while senior management handles larger ones. This ensures that the right people are involved at the right stages, minimizing unnecessary delays.
4. Realistic timelines and alerts
Consider the sales approval process like planning a project timeline. Set realistic deadlines for each phase, similar to setting milestones in project planning. For instance, propose a deadline for sales teams to submit proposals, allocate time for internal reviews, and set a final authorization date. Implement alerts and notifications like project reminders to keep everyone on track and aware of approaching deadlines.
Luru shares pipeline health alerts in real-time which keeps you on top of your workflow. You know when everything’s moving smoothly or when something’s stuck.
5. Centralized documentation system
Think of a centralized documentation system as a shared drive for project documents. Just as project teams store project plans, reports, and documents in a centralized location, keep all sales-related documents in one system. This ensures that everyone has access to the latest information, similar to accessing the latest project files. A centralized system reduces confusion, promotes consistency, and avoids discrepancies.
6. Post-implementation evaluation
Imagine post-implementation evaluation as a project post-mortem. Gather feedback from stakeholders, similar to collecting insights from team members after project completion. Use this feedback to optimize the workflow, addressing any bottlenecks or inefficiencies. Continuous improvement ensures that the sales approval process evolves, much like refining project processes for future projects.
7. Integration with other systems
Integration with other systems is like syncing project management tools. Just as project management tools integrate with communication platforms, consider integrating your sales approval workflow with CRM and ERP systems. This enhances data consistency, reduces manual data entry, and provides a comprehensive view of the sales process, similar to how integrated project tools provide a holistic view of project progress.
Overcoming common challenges in sales approvals
1. Dealing with multi-level and cross-departmental approvals
Navigating the complexities of multi-level and cross-departmental approvals demands a meticulous approach to communication and coordination. The challenge often lies in the potential for proposals to encounter delays or bottlenecks as they traverse different levels and departments.
Luru was crafted to address this issue with utmost efficiency. Our Deal Rooms are where the magic happens, bringing together departments like Customer Service, Sales, and Marketing. With features like automatic channel creation in Slack, Luru ensures seamless, lossless cross-functional collaboration. This setup allows teams to stay on the same page, enabling timely, well-informed decisions. It's about ensuring that no crucial deal slips through the cracks, fostering a collaborative environment where every department contributes effectively to the sales process.
Furthermore, Luru's Pipeline Visibility feature provides a comprehensive overview of your pipeline. Stay informed about when a deal enters the pipeline, and progresses to the next stage — all in real-time, fostering enhanced team collaboration.
2. Addressing bottlenecks in sales approvals
Bottlenecks in the sales approval process can significantly slow down progress. Identifying these bottlenecks requires regular assessments and data analysis to pinpoint specific stages or departments causing delays.
Once identified, streamlining becomes imperative. Adjusting approval levels, redistributing responsibilities, and introducing automation where feasible streamlines critical points and minimizes manual holdups. The optimization process should be ongoing, ensuring the approval process remains agile and responsive to evolving demands.
3. Balancing control and flexibility
The delicate balance between control and flexibility is pivotal for a dynamic sales approval process. Establishing clearly defined approval criteria and guidelines provides the necessary structure while building in flexibility accommodates unique scenarios. Decision-makers must be empowered with the authority to navigate within established parameters, fostering agile decision-making.
This approach ensures routine approvals follow a structured path, maintaining control, while allowing for flexibility in exceptional situations. Striking this equilibrium is essential for a sales approval process that is both robust and adaptive to the nuanced demands of diverse deals.
Advanced strategies for sales approval optimization
1. Tiered approval levels
To elevate sales approval optimization, consider implementing tiered approval levels that align with deal size or discount percentage. This strategic approach ensures that approvals are tailored to the specific characteristics of each deal.
For instance, smaller deals may follow a streamlined approval process, while larger transactions necessitate scrutiny at higher levels. This tiered structure not only expedites approvals for routine cases but also ensures meticulous evaluation for high-impact deals, striking a balance between efficiency and diligence.
2. Predictive approval modeling
Embrace the power of data analytics to propel sales approval optimization to new heights. Leverage historical data and analytics tools to create predictive approval models. By analyzing past approvals, trends, and outcomes, these models forecast potential approval needs for upcoming deals.
This foresight allows for proactive resource allocation and streamlining of the approval process. Predictive approval modeling empowers teams to anticipate bottlenecks, allocate resources efficiently, and maintain a responsive and proactive approach to evolving sales scenarios.
3. Dynamic approval routing with AI
Integrate cutting-edge technologies like AI and machine learning to introduce dynamic approval routing into your sales approval process. This innovation enables the system to learn from historical data and dynamically adjust approval routes based on evolving patterns.
AI-driven dynamic approval routing ensures that each deal is directed to the most appropriate stakeholders, considering factors such as deal complexity, customer history, and current market conditions. This not only enhances the efficiency of the approval process but also adapts to the ever-changing landscape of sales dynamics.
Enhance your sales approval processes with Luru
Sales approvals are not just a step in the process; they are a pivotal element in shaping the efficiency and success of your sales journey. Before the advent of process automation tools like Luru, the time taken for approvals often became a bottleneck, slowing down sales cycles and impacting business momentum.
Luru revolutionizes this aspect of sales with its cutting-edge approval automation. By automating the approval process and integrating timely reminders for decision-makers, Luru significantly reduces the time taken for approvals. This acceleration is not just about speed; it's about transforming the sales cycle into a more dynamic, responsive, and efficient process.
With Luru, leaders can make swift, informed decisions with just a click, directly from their preferred messaging apps. This level of agility in the approval process ensures that deals are not just closed but propelled forward with unprecedented momentum. To explore how Luru can be a strategic partner in your sales journey, don't hesitate to reach out to us.
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