METRICS ANALYSIS AND SALES AT

HIGH RADIUS

A report submitted in partial fulfilment of the requirements for the degree of

BACHELOR OF TECHNOLOGY IN CIVIL ENGINEERING

by

ALISHA ALI
(1501005)

Supervisor
Prof. JAGORI DUTTA

School of Civil Engineering

Kalinga Institute of Industrial Technology
Deemed to be University
Bhubaneshwar, 751024
April 2019
 Declaration of Scholar
I hereby certify that the work which is being presented in the report entitle

METRICS ANALYSIS AND SALES AT HIGH RADIUS in partial fulfilment

of the requirements for the award of the degree of Bachelor of Technology in

School of Civil Engineering under Kalinga Institute of Industrial Technology,

Deemed to be University, Bhubaneshwar is an authentic record of my own work

carried out during the period from 2018-2019 under the supervision of

Prof. Jagori Dutta

The matter embodied in this thesis has not been submitted by me for the award

of any other degree of this or any other University/Institute.

[Alisha Ali]

This is to certify that the above statement made by the student is correct to the

best of our knowledge.

Kanika Jain
(Director – Shared Business Services)
HighRadius Technologies
 Abstract
Most companies operate by allowing a portion of their sales to be on credit. Sometimes,
businesses offer this credit to frequent or special customers receive periodic invoices. The
practice allows customers to avoid the hassle of physically making payments as each
transaction occurs. In other cases, businesses routinely offer all of their clients the ability to
pay after receiving the service. For example, electric companies typically bill their clients after
the clients received the electricity. While the electricity company waits for its customers to pay
their bills, the company considers unpaid invoices a part of its accounts receivable. Accounts
receivables are current assets so they are a measure of a company's liquidity or ability to cover
short-term obligations without additional cash flows. Fundamental analysts often evaluate
accounts receivable in the context of turnover, which they call accounts receivable turnover
ratio, which measures the number of times a company has collected on its accounts receivable
balance during an accounting period. Further analysis would include days of sales outstanding
analysis, which measures the average collection period for a firm's receivables balance over a
specified period. There are ways companies can improve on this front and streamlining the
process with the help of ERP is one of them. ERP software typically consists of multiple
enterprise software modules that are individually purchased, based on what best meets the
specific needs and technical capabilities of the organization. Each ERP module is focused on
one area of business processes, such as product development or marketing. SAP is one such
ERP that incorporates the key business functions of an organization. SAP Financial Supply
Chain Management is a set of applications from SAP that manages customer-related financial
functions such as risk assessment, billing, receivables, and collections, within an SAP ERP
environment. SAP Financial Supply Chain Management is designed to increase visibility into
and control of cash-related processes between a company and its business partners. The goal
of SAP Financial Supply Chain Management is to predict cash flow, reduce working capital
and operating expenses by increasing the number of timely customer payments and reducing
the number of debtors, and integrating business processes throughout the financial supply
chain. Order to Cash cycle can be optimized through implementation of Standard FSCM
module and enhancing them. HighRadius offers various accelerators as solutions to cater to
some popular business needs and requirement. These accelerators work on top of standard SAP
along with related solutions and make it an effective option by eliminating costly and difficult
integrations to connect operations to the enterprise.
 TABLE OF CONTENTS

DECLARATION OF SCHOLAR………………………………………………………….........ii
ABSTRACT………………………………………………………………………….…...…… iii
TABLE OF CONTENTS……………………………………………………….….……....……iv
LIST OF FIGURES………………………………………………………………….….………vi
LIST OF ABBREVIATIONS……………………………………………………………….….vii
1. INTRODUCTION…………………………………………………………...………….…...01
1.1 Overview……………………………………………...….……………………...….01
1.2 Purpose of Study……………….……………………………………………..…….01
1.3 Organisation of the report………..…………………………………………..……...02
2. ORDER TO CASH (O2C) CYCLE……….………………………………………...……….03
2.1 Overview………………………….…………………………..…………………….03
2.2 What is the order to cash cycle……..……………………………….……………….03
2.3 Order to Cash Process……………….………………………………..…………….04
3. LITERATURE REVIEW……………………………………………………………..……..06
4. FINANCIAL SUPPLY CHAIN MANAGEMENT AND ACCOUNT RECEIVABLES…....08
4.1 What is Financial Chain Management……………………………………………....08
4.2 What is Account Receivables…………………………………………………..…...09
4.3 Factors Affecting Account Receivables……….……………………………………10
5. IMPORTANCE AND METHODOLOGY…………….………………………………….....13
5.1 Why is O2C cycle Important………………….……………………………… ……13
5.2 Using technology to improve the O2C Cycle………………………………………14
5.3 Steps of the cycle…………………………………………………………………...14
6. METRICS REPORTING AND ANALYSIS……………………………………………..…15
6.1 Need of Metrics report and Analysis……………………………………………….15
6.2 Key Performance Indicators (KPI)…………………………………………………15
6.3 Business Metrics……………………………………………………………………15
6.4 Key market Metrices……………………………………………………………….16
6.5 Best Marketing Metrices…………………………………………………………...16
6.6 Most commonly used Sales KPIs & Metrices……………………………………...16
6.7 Sales Conversion Rate (SCR)………………………………………………………17
6.8 Calculating Sales Conversion Rate……………………………….………………...18
7. SALES CYCLE……………………………………………………………………………...19
7.1 Stages of sales cycle………………………………………………………………..19
7.2 Importance of sales cycle………………………………………….………………..20
8. LIFECYCLE OF A DEAL…………………………………………………..………..……...22
8.1 Generating Deal……………………..……………………….………………......…22
8.2 Pre-Discovery Discussion………………………………………….…………..…...23
8.3 Discovery Call…………………………………………………………….…..……25
8.4 Demonstration Call……………………………………………….…………...........26
8.5 Return on Investment (ROI) Preparation……….………………..…...…………..…26
8.6 Identification of Stake Holders…………………………………..……………….…26
8.7 Commercial Qualification Phase………………………………..…………….…….27
8.8 Negotiations…………………………………………………….……………..……27
8.9 Contracts………………………………………………………….……………..….27
9. CONCLUSION……………………………………………………….…….……….……….28
REFERENCES……………………………………………………….……….…….………….29
ACKNOWLEDGEMENTS……………………………………………………………………30
 List of Figures

Chapter 2
Figure 1: Order to Cash cycle (O2C) is a set of business processes…………………………03

Figure 2: Order to Cash Processes…………………………………………………………….04

Chapter 4
Figure 3: Key elements of Financial Chain Management…………………………………….09

Chapter 6
Figure 4: Sales Lead Lifecycle Report………………………………………………………..18

Chapter 8
Figure 5: Sales Lifecycle of a deal……………………………………………………………22

Figure 6: Sample Pre-Discovery Document…………………………………………………24

Figure 7: Sample Assessment Questionnaire…………………………………………………25

Figure 8: Sample ROI Model…………………………………………………………………26

Figure 9: Miller- Heiman Roles in B2B scenarios……………………………………………27

 LIST OF ABREVIATIONS

1. SaaS: Software as a Service

2. O2C: Order to Cash

3. KPI: Key Performance Indicators

4. ROI: Return On Investment

5. DSO: Days Sales Outstanding

6. FSCM: Financial Supply Chain Management

7. ERP: Enterprise Resource Planning

8. CCC: Cash Conversion Cycle

9. ROCE: Return On Capital Employed

10. SCM: Supply Chain Management

11. AR: Account Receivables

12. DIO: Days Inventory Outstanding

13. DPO: Days Payable Outstanding

14. MQL: Marketing Qualified Leads

15. SQL: Sales Qualified Leads

16. LTV: Lifetime Value of a Customer

17. CAC: Customer Acquisition Cost

18. SCR: Sales Conversion Rate

19. DIL: Day in a Life

20. CAPEX: Capital Expenditure

21. OPEX: Operational Expenditure

22. B2B: Business to Business

 CHAPTER 1

Introduction
1.1 Overview

HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company. The HighRadius

Integrated Receivables platform reduces cycle times in the order-to-cash process through
automation of receivables and payments across credit, electronic billing and payment
processing, cash application, deductions and collections. Powered by the Rivana Artificial
Intelligence Engine and Freeda Digital Assistant for order-to-cash teams, HighRadius enables
organizations to leverage machine learning to predict future outcomes and automate routine
labour-intensive tasks. The radiusOne B2B payment network allows suppliers to digitally
connect with buyers, closing the loop from supplier receivable processes to buyer payable
processes. HighRadius solutions have a proven track record of optimizing cash flow, reducing
days sales outstanding (DSO) and bad debt, and increasing operational efficiency so
companies may achieve strong ROI in just a few months. The HighRadius solutions primarily
function in the Order to Cash cycle of the Financial Supply Chain Management. This report is
a culmination of my one-year experience of working as a Sales Operations Analyst intern at
HighRadius as part of which, I developed a thorough understanding of the Sales Cycle at
HighRadius and the various metrics that help the mid management and higher management
judge the performance of the Sales Representatives.

1.2 Purpose of the study

The specific objectives of the present study are as below.

- To carry out literature review for detail understanding of Financial Supply Chain
Management (FSCM).
- To understand the Order to cash(O2C) cycle and how technology can be used to
improve it.
- To understand the metrics that are used to calculate KPIs or Key Performance Index of
the Sales Team.
- To understand the stages of sales cycle and the importance of it in B2B sales.
- To understand the lifecycle of a deal.
1.3 Organisation of the report
The specific objectives of the present study are as below.

- To carry out literature review for detail understanding of Financial Supply Chain
Management (FSCM).
- To understand the Order to cash(O2C) cycle and how technology can be used to
improve it.
- To understand the metrics that are used to calculate KPIs or Key Performance Index of
the Sales Team.
- To understand the stages of sales cycle and the importance of it in B2B sales.
- To understand the lifecycle of a deal.
 CHAPTER 2

Order to Cash (O2C) Cycle

2.1 Overview
Order to Cash, also known as O2C or OTC, refers to the set of business processes for receiving
and processing customer sales orders for goods and services and their payment. These
processes are at the heart of all businesses and unless they are managed efficiently and
accurately, organizations would not only face financial problems, but also reputational issues.
Every department in a given company is affected either directly or indirectly by the Order to
Cash system.

Figure: 1 Order to cash (OTC or O2C) is a set of business processes

2.2 What is the order to cash cycle?

Order to cash, also referred to as O2C, OTC, or the quote-to-cash cycle, is the term used to
describe the set of businesses processes for receiving and completing a sale. The order to
cash cycle begins when an order is placed and ends when payment is received and that
payment is recorded in the General Ledger. Keeping in mind the process may change slightly
from one company to the next, the order to cash cycle when broken into stages and sub-
processes looks something like this:
 • Quote request and delivery: when a customer requires a quote and approval prior to
making a purchase

• Order entry: when the customer purchases an item or schedules a service

• Order fulfilment: when that item/service is delivered

• Invoicing: when accounting creates and delivers an invoice to the customer.

• Invoice collection: the process of collecting the money owed by the customer.

• Cash application: when the payment is recorded in the general

The process seems simple, but each sub process has its very own set of challenges,
inefficiencies, and other issue that can slow the final and arguably the most important
stage of the process, getting paid.

2.3 Order to Cash process

Figure 2: Order to Cash Processes

- A standard Order-To-Cash Cycle is divided into above sub-processes. These might
vary from business to business by key classifications remain same.
- Order to cash normally refers to one of the top-level business processes for receiving
and processing customer orders.

- It is essential for every business to manage it efficiently. As a business grows, so does

the complexity of each of these stages in O2C.

- Some computer systems, like an enterprise resource planning system (ERP), connect
each of the order to cash processes. In most large ERP systems, like Oracle and SAP,
the order to cash process has modules.

- By prioritizing and refining the order to pay system, one is setting one’s company up
for long-term success.
 CHAPTER 3

Literature Review

MR Fellenz, C Augustenborg, M Brady and J Greene (1) explored current models and practice
regarding the dynamics of financial flows along global supply networks. Their work was mainly
based on data collected from technology and service providers that focus on such issues along
global supply networks and identified requirements for improved solutions to supply chain
finance challenges. This research has particular relevance in the light of the disruptions that the
global credit crunch has brought to global financial system and the related changes that are
likely as responses to these disruptions.

Ronald H. Ballou (2) provides ideas for researchers and managers which are valuable in
defining their action agendas for improving supply chain operations. The main challenges to be
addressed, as identified by the author, are the need for a mechanism of sharing the benefits
of cooperation among the supply chain members, for enhanced relationship skills of supply
chain managers and for improved methods of estimating the revenue contribution potential of
the supply chain.

Chae, B. (3) highlights the need for the development of key performance indicators (KPIs)
for the purposes of measuring and monitoring supply chain performance. He seeks to offer a
practical approach to performance measurement and to present a list of key KPIs.

This paper offers insights from industry in the area of supply chain performance measurement
and a practical approach to developing performance metrics. It concludes that companies should
focus on only a small list of KPIs which are critical for their operations management, customer
service and financial viability. Potential KPIs should also be developed for each of SCOR
model’s four meta‐processes (plan, source, make, and delivery) and need to be hierarchically
grouped such as primary and secondary metrics.
Grosse-Ruyken, P.T.,Wagner, S.M. and Jönke, R. (4) examined the contribution of the cash
conversion cycle (CCC) as a proper measure of a firm’s performance. The empirical results
indicate a significantly negative relationship among the CCC and return on capital employed
(ROCE). The authors argue that the optimal level of CCC for responsive supply chains must be
assessed holistically and conclude that the proper working capital management depends on the
business model, its specific supply chain design configurations and risk aspects within the
supply chain.

Yang, S.A. and Birge, J.R (5) make usage of a model that explicitly captures the
interaction among firms’ operations decisions and financial risks. They demonstrate that with
demand uncertainty, supply chain efficiency is improved, via trade credit, by acting as a risk-
sharing mechanism. Supply chain management and supply chain finance are undergoing a vast
transformation. Since the average cost of purchased materials, components, and services across
manufacturing firms frequently exceeds 60% to 70% of the total cost of operations, the effective
management of the product, information and funding flows along the entire supply chain is
critical. Competition among firms nowadays means competition between supply chains and
networks. The importance of successful supply chain management has been highlighted by a
variety of empirical studies that have investigated the relationship between well designed
supply chain management and a firm’s profitability which further defines the success of an
organisation.
 CHAPTER 4

Financial Supply Chain Management and

Account Receivables

4.1 What is Financial Supply Chain Management?

HighRadius primarily functions to ease and optimise the processes involved in Financial
Supply Chain Management (FSCM). Financial supply chain management (FSCM) is a set of
software tools and processes designed to enhance an organization’s product flow, maximizing
profitability and minimizing expenses. To accomplish this objective, FSCM takes advantage
of principles that have proven effective in supply chain management (SCM) for decades.

Traditionally, SCM has comprised the oversight of resources as they make their way from
supplier to manufacturer to wholesaler to retailer to consumer. The SCM process breaks down
into three main flows: the product flow, the information flow and the finances flow.

In FSCM, the finances flow is expanded. The FSCM process recognizes and analyzes
interrelated events that impact working capital, payment terms, pricing, and inventory. In
addition, FSCM takes into account the needs and behaviors of employees and departments in
the organization. For example, sales trends might be influenced by employee bonuses,
scheduling delays, department-head changes, or unexpected resignations.
 Figure 3: Key Elements of FCM

4.2 What is Account Receivables?

Accounts Receivable (AR) is the proceeds or payment which the company will receive from
its customers who have purchased its goods & services on credit. Usually the credit period is
short ranging from few days to months or in some cases maybe a year.

Description: The word receivable refers to the payment not being realised. This means that the
company must have extended a credit line to its customers. Usually, the company sells its goods
and services both in cash as well as on credit.

When a company extends credit to the customer, the sale is realised when the invoice is
generated, but the company extends a time period to the customers to pay the amount after
some time. The time period could vary from 30-days to a few months.

Account Receivables (AR) are treated as current assets on the balance sheet. Let's understand
AR with the help of an example. Suppose you are a manufacturer M/S XYZ Pvt Ltd and you
manufacture tyres.

A customer gives you an order of Rs 1,00,000 for 100 tyres. Now, when the invoice is generated
for that amount, sale is recorded, but to make the payment the company extends the credit
period of 30-days to the customer.
Till that time the amount of Rs 1,00,000 becomes your account receivable because the customer
will pay that amount before the period expires. If not, the company can charge a late fee or
hand over the account to a collections department.

Once the payment is made, the cash segment in the balance sheet will increase by Rs 1,00,000,
and the account receivable will be decreased by the same amount, because the customer has
made the payment.

The amount of account receivable depends on the line of credit which the customer enjoys from
the company. Usually, this is offered to customers who are frequent buyers.

4.3 Factors Affecting Account Receivables

SAP FSCM streamlines the whole Order to Cash cycle process. For better results in Account
Receivables following factors play an important role:

1. Cash Conversion Cycle- The cash conversion cycle (CCC) expresses the length of time, in
days, that it takes for a company to convert resource inputs into cash flows. The cash conversion
cycle attempts to measure the amount of time it will take in the production and sales process
before it is converted into cash through sales to customers.

Cash Conversion Cycle = Days Inventory Outstanding (DIO) + Days

Sales Outstanding (DSO) – Days Payable Outstanding (DPO)

2. Days Sales Outstanding or DSO- This is a very important feature w.r.t Receivables

- The days sales outstanding, measures the number of days it takes a company to collect cash
from its credit sales. This calculation shows the efficiency of a company’s collections
department.

- A lower ratio is more favorable because it means companies collect cash earlier from
customers and can use this cash for other operations. It also shows that the accounts receivables
are good and won’t be written off as bad debts.

-A higher ratio indicates a company with poor collection procedures and customers who are
unable or unwilling to pay for their purchases. Companies with high days sales ratios are unable
to convert sales into cash as quickly as firms with lower ratios
DSO= Account Receivable/Credit Sales* No of Days

3. Write Off- A procedure used in accounting when an asset is determined to be uncollectible

and is therefore considered to be a loss.

4. Days Deduction Outstanding- It's a statistic that illustrates how well or how poorly your
company is managing deductions. You calculate DDO by dividing the amount of open
deductions by the average value of deductions incurred over the last three months.

5. Credit Risk- The probable risk of loss resulting from a borrower's failure to repay a loan or
meet contractual obligations.

• A lender may not receive the owed principal and interest, which results in an interruption of
cash flows and increased costs for collection.

• Credit risks are calculated based on the borrowers' overall ability to repay. To assess credit
risk on a consumer loan, lenders look at the five C's: credit history, capacity to repay, capital,
the loan's conditions and associated collateral.

6. Credit Score- A credit score is a statistical number that evaluates a consumer's

creditworthiness and is based on credit history. There are five main factors evaluated when
calculating a credit score:

-Payment History

-Total Amount owed

-Length of credit history

-Types of credit

-New Credit

-There are three major credit reporting agencies in the US-Experian, Transunion and
Equifax

7. Aging- The aging method takes place by sorting a company's accounts receivable according
to the dates of the unpaid invoices. The invoice amounts that are not yet due are entered into
the first of perhaps five columns.
For example: The invoice amounts that are 1-30 days past due are entered into the second
column. Amounts that are 31-60 days past due are entered into the third column, and so on.

The goal of the aging method is to have the company's balance sheet report the true amount of
the receivables that will be turning to cash

8. Working Capital- Working capital, also known as net working capital, is the difference
between a company’s current assets, like cash, accounts receivable (customers’ unpaid bills)
and inventories of raw materials and finished goods, and current liabilities, like accounts
payable.

Working Capital = Current Assets - Current Liabilities

9. Dunning- A dunning letter is a reminder sent to a customer, stating that the he or she is
overdue in paying an AR to the sender. Dunning letters typically follow a progression from
polite reminders to more strident demands for payment, if the customer continues to be non-
responsive in paying.

10. Credit Memo- A credit memo may be issued the seller because the buyer returned goods
to the seller, or there is a pricing dispute, or other reasons under which the buyer will not pay
the seller the full amount of the invoice.

The seller records the credit memo as a reduction of its account receivables balance while the
buyer records it as a reduction in its account payables balance

11. Cash Discount- A cash discount is a reduction in the amount invoice that the seller allows
the buyer. This discount is given in exchange for the buyer paying the invoice earlier than the
normal payment date of the invoice. There are two reasons why a seller might make this offer:

· To obtain earlier use of cash

· In order to entirely avoid the effort of billing the customer.

12. Bad Debt- Bad debt is debt that is not collectible and therefore worthless to the creditor.
Bad debt is usually a product of the debtor going into bankruptcy but may also occur when the
creditor's cost of pursuing the debt collection activities is more than the amount of the debt.
Once a debt is considered bad, the business may be able to write it off as an expense on its
income tax return
 CHAPTER 5

Importance and Methodology

5.1 Why is the order to cash cycle important?

Think about what all the order-to-cash cycle involves- it’s how the entire business runs!
Streamlining your order to cash process is critical to improving and maintaining
profitability, customer retention, and overall business growth. A slow or broken process
anywhere along the cycle can slow everything and cause significant damage to your
bottom line in a variety of ways.

One example would be a customer leaving you for another business because you’re having
trouble with stage three of the cycle, order fulfilment. If you are consistently late or sending
incorrect orders, they will eventually get fed up and quickly find another product/service
provider. Or during stage five when a customer has given a few excuses for not paying their
invoice and has now gone 120 days past due, leaving your business scrambling to find another
way to pick up on the money you’ve lost.

There are many opportunities for things to go wrong throughout the order to cash cycle, but
we find that a majority of businesses struggle most toward the end of the cycle, collecting
the money owed to them. Usually companies have a tough time getting paid not because the
customer is disputing an invoice or avoiding payment, but because the company does not
have the visibility into accounts receivable and the tools, they need to quickly identify late
invoices and take proactive steps to rectify the situation. Think about it- you use ERP and
CRM to help you with the beginning of the cycle, why not implement software to help you
close the loop and get your money to the bank?
5.2 Using technology to improve the order to cash cycle
Since ERP and CRM software options usually fall short on invoice collection, accounts
receivable software has stepped in to automate that process. An automated accounts
receivable software has the ability to send automated email. Automated email will send out
invoices, welcome letters, collection letters, reminder emails and past due notices
automatically to any customer that falls within certain parameters set by your company. If
your business wants to send a first collection letter to all customers 30 days past due, a rule is
set in the system and those emails will be sent automatically to just those customers that are
30 days past due. Accounts receivable software also offers the option of using an online bill
pay system. Online bill pay allows customer to enter a secure payment portalto pay their
invoices with credit card or ACH payment, speeding up payment and less work for the
collection’s representatives. Among many other functionalities, accounts receivable software
helps to close the gaps in the order to cash cycle that are crucial to collecting payment.

5.3 Steps of the Order to Cash Cycle

1. The cycle begins with the system receiving orders from the customer. This could be
via email, Internet, sales person, fax or by some form of Electronic Data Interchange.
In some businesses, the order could be a simple purchase request for a particular
product, while in other service oriented or wholesale businesses, the customer and
the company would enter into a long-term or short-term contract.

2. The company might even conduct a credit review of the customer before accepting
the order, especially if they have plans of offering the customer deferred payment
options.

3. The order is documented and the company begins the task of fulfilling the order.

4. Once the product has been shipped and delivered, or the service has been fulfilled,
the most important stage of the cycle begins with regard to cash management. The
invoice is created and sent to the customer for payment.

After the customer has made the payment, the accountants note the entry in the general ledger
or in case an ERP is used to maintain data, then those invoices get cleared off.
 CHAPTER 6

Metrics Reporting and Analysis

6.1 Need of Metrics report and analysis

As Shared Business Services Department, we do various kind of reporting and analysis of
performance metrics. Apart from that, we add value to the organisation by driving High
performance culture at HighRadius by measuring the different parameters which enables the
organisation to grow and to reach a higher level of state

6.2 An Introduction to Key Performance Indicators Examples

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively
a company is achieving key business objectives. Organizations use KPIs to evaluate their
success at reaching targets. Learn more: What is a key performance indicator (KPI)?

Selecting the right one will depend on your industry and which part of the business you are
looking to track. Each department will use different KPI types to measure success based on
specific business goals and targets. Find out what types of key performance indicators are
relevant to your department, industry, or role: Types of KPIs.

Once you’ve selected your key business metrics, you will want to track them in a real-time
reporting tool. KPI management can be done using dashboard reporting software, giving your
entire organization insights into your current performance.

6.3 Business Metrics

A Business Metric is a quantifiable measure that is used to track and assess the status of a
specific business process. Every area of business has specific metrics that should be monitored
– marketing metrics can include tracking campaign and program statistics, while sales
metrics may look at the number of new opportunities and leads in your database, and executive
metrics will focus more on big picture financial metrics.
6.4 Key marketing metrics every business should measure
Marketing Metrics and Key Performance Indicators (KPIs) are measurable values used by
marketing teams to demonstrate the effectiveness of campaigns across all marketing channels.
Whether you are looking to track digital marketing performance, SEO progress, or your social
media growth, having measurable marketing metrics and KPIs set up can help your business
reach targets month-over-month. Track your marketing goals with these marketing metrics and
KPI examples.

6.5 Best Marketing Metrics

The top KPIs for modern marketing teams:

• Marketing Qualified Leads (MQL)

• Sales Qualified Leads (SQL)

• Funnel Conversion Rates

• Brand awareness

• Customer engagement

• Marketing spend per customer

• Return on marketing investment

• Lifetime value of a customer (LTV)

• Customer acquisition cost (CAC)

• Customer retention

6.6 Most commonly used Sales KPIs & Metrics

The top KPIs for modern sales teams and sales executives are:

• Monthly Sales Growth

• Average Profit Margin

• Monthly Sales Bookings

• Sales Opportunities

• Sales Target

• Quote To Close Ratio

 • Average Purchase Value

• Monthly Calls (or emails) Per Sales Rep

• Sales Per Rep

• Product Performance

• Sales by Contact Method

• Average New Deal Size/Length

• Lead-to-Sale %

• Average Cost Per Lead

• Retention and Churn Rates

• Customer Lifetime Value

• Average Conversion Time

• New and Expansion MRR

• Number of Monthly Onboarding and Demo Calls

6.7 Overview: Sales Conversion Rate

The Sales Conversion Rate (SRC) metric measures the effectiveness of your sales team at
converting leads into new customers. It’s an important metric for aligning your sales and
marketing team as both teams will use this metric to determine the quality of leads.

The process for generating leads is the responsibility of marketing, and that team will engage
in lead generation activities. For example, a marketing team will organize and execute a
conference sponsorship (often in coordination with sales) to generate sales-ready prospects.
Once marketing qualifies those leads, it’s the responsibility of sales to convert those leads into
paying customers.

Perhaps marketing is able to generate 100 leads for sales, and after working with those leads
sales is able to win 10 new customers. That is a 10% conversion rate. The real question is
whether this is good or bad. Ultimately, this depends on your past historical performance and
industry benchmarks. 10% sales conversion rate may be stellar or it may be terrible. It depends
what you sell and the market to which you sell.
 Figure 4: Sales Lead Lifecycle Report

6.8 How to calculate sales conversion rate

(Leads converted into sales / qualified leads) x 100

(Number of conversions / Number of Clicks) x 100

 CHAPTER 7

Sales Cycle
7.1 Stages of sales cycle

7.1.1 Generate Interest

a. First interaction between client and HRC sales team

b. Method- Discovery call

c. Objective - Introduction of HighRadius and Solutions

d. Identification of Customer Pain points

7.1.2 Functional Alignment

a. Discussion of challenges and solutions on functional grounds

b. Method- Solution Demo (Identified Solution)

c. Objective – Get a functional win from solution perspective

d. Can be deck presentation or live system (Can be iterative)

7.1.3 Value Alignment

a. Discussion of AR metrics, process, cost, ROI on economic terms

b. Method- DIL (Day in a life), ROI (Return of Investment) Validation,

Value Assessment

c. Objective – Get economical understanding of the opportunity

d. Combination excel, ppt and negotiation exercises (Can be iterative)

7.1.4 Stakeholder’s Buy-in

a. Internal alignment on functional and economical terms for client

b. Method- Understanding power structure.

c. Objective – Get verbal/concrete economical buy-in from client

 d. Iterative process of conversation to adapt economical changes

7.1.5 Budget Approval

a. Tentative alignment of functional and economical terms

b. Method-Understanding budget approval process (Iterative Process)

c. Objective-CAPEX vs OPEX

d. Detailed Functional, IT, Economical justifications might be needed.

7.1.6 Contracts
a. Green flag from client from economical and functional perspective.

b. Method-Drafting of contracts.

c. Objective-Final check on functional, economical and legal grounds

d. Combination of internal approval and external approval

7.2 Importance of sales cycle

The goal of every company is to shorten the cycle, to close the deal as quickly as possible in
order to maximize profits. The efficiency of the sales cycle is a testament to how well you
convert leads into sales, which of course translates into a healthier bottom line. So, the sales
cycles helps in:

1. Pursue only qualified leads: Chasing after people who aren’t interested is a huge
waste of time and resources. If the person or company doesn’t have the problem for
which one has the solution, then it’s time to move on.

2. Remove barriers promptly: People put up barriers to change. They fear the
unknown, which in this case is the solution. If the customer has an identified need for
the products and services, one must remove their resistance and put them at ease.
 3. Emphasize measurable value: Customers must see the value in what you are
offering and they want to be able to measure it. How will the product or service improve
their operations? By what percentage can the customer expect to see an increase in
efficiency/sales/profits? If one can’t answer these questions, the cycle can drag out
indefinitely.

The sales cycle is an endless loop of engagement, by which you identify interested potential
customers and nurture them through the sales process. Efficiently and effectively guide the
prospects and existing customers through each sale and you will get more from your marketing
efforts.
 CHAPTER 8

Lifecycle of a Deal
8.1 Generating the Lead

Any deal starts with marketing team generating the lead.

There is a clear transitioning between the stages when the deal transfers from the realm of
marketing into the realm of sales. The MDR team, then follows up with the potential
customer to get them on a call. If the customer agrees, then an introductory/discovery call
is set up.

Figure 5: Sales Lifecycle of a deal

8.2 Pre-Discovery Discussions
The entire team for the account, consisting of an Inside Sales Executive, an Account Executive
and a Solution Principal discuss about the account a few days prior to the discovery call. The
basis of the discussions is the communication that the ISE had with the customer till now. Also,
we try to find what might be potential pain points of the customer depending upon the industry.

The School Principal Principal also prepares a pre-discovery document, which captures all the
information about that potential customer.
Figure 6: Sample Pre-Discovery Document
8.3 Discovery Call
On the discovery call, we understand the customer’s pain points and identify the goldmine, i.e.
the area where HighRadius can provide maximum value. We then perform sizing of the wallet
to gauge how much the customer is currently spending on their A/R activities. Generally, the
next step of a discovery call is to set up a demonstration of the solution that the customer is
interested in.

Prior to the demonstration call we ask our prospect a wish list, i.e. a list of features they wish
our solution should have to solve their A/R problem. This helps us to tailor the solution
demonstration according to the client’s needs rather than doing a vanilla demonstration. Many
a times, prior to the call, we also send a questionnaire to be filled. This gives us a heads up in
knowing the scale of operations and gives us a preview of their processes.

Figure 7: Sample Assessment Questionnaire

8.4 Demonstration Call
In this call, we start with a brief overview of what our product does and then dive into the
scenarios that correspond to the challenges that the client is currently facing. A tailored
demonstration is always the best way to get the client engaged. We keep the demonstration
conversational rather than one-way pitch so that the customer feels at ease and opens up.

8.5 Business Case/Return On Investment (ROI) preparation

After the demonstration calls, the next step is to prepare a business case for our customers.
This helps them to present the business case internally and get approval for the project and
helps it in being justified.

An important part of the business case is the Return on Investment (ROI) of the project. So
rather than just selling the product, we adopt a consultative approach to help our customers
in the best possible way.

Figure 8: Sample ROI Model

8.6 Identification of Stakeholders of the deal

During the course of our discussion with the client, we identify the key stakeholders of the
deal. According to Miller Heiman, there are different personalities in the B2B space that have
a key say in making a decision. Also, as a part of our Strategy and Action Plan we closely
monitor the personality type of different stakeholders, so as to make the deal conducive to
them.
 Figure 9: Miller- Heiman Roles in B2B scenarios

8.7 Commercial Qualification phase

At this stage, we engage in understanding the prospect’s Buying Process, knowledge of their
internal formal committees, approving authority, budgets (CAPEX/OPEX) and Project
timelines.

8.8 Negotiations
If the customer is not sold on the Business Case and ROI, then a process of Negotiation
starts where we identify areas that can be de-scoped to make the required changes in the
pricing. It usually takes a lot of back and forth, but once done; the deal moves to the contract
stage.

8.9 Contracts
In this phase, we prepare the Order Form, a Master Service Agreement and a Statement of
Work for the customer. We first need to get these documents internally approved and then
send it to customer. If the customer doesn’t agree with some terms and conditions, then we
get “redlines” which we need to resolve internally before the final document is sent to the
customer. This usually takes a lot of back and forth.

Once, this is done the contracts are signed and the deal is closed.

The average sales lifecycle is about 4-6 months because of the complexities
involved in B2B scenarios of billion-dollar companies”
 CHAPTER 9

Conclusion

Financial Supply Chain Management helps to predict cash flow, reduce working capital and
operating expenses by increasing the number of timely customer payments and reducing the
number of debtors, and integrating business proc There is great scope for development by using
theories such as principal-agent theory or property rights theory to explain the value of co-
operative financing models in supply chains. Analysis of the use of information (the
information flow) in supply chains not just for planning purposes but also for improving
financial decisions may also offer interesting insights. For service providers, especially
financial and logistics service providers, new business models can be found in developing
solutions that combine the needs of logistics, SCM and finance.

Sales in a B2B model plays a very important role as there are Larger average transactions than
in B2C. Business-to-business transactions are often thousands of dollars and can reach millions
or even billions. There is a need for professional decision-making. B2B buyers are experts so
a B2B sales person has to be an expert, too. There are more stakeholders involved than in B2C.
Especially in the case of bigger deals, a business-to-business sales person has to convince not
only one but many different stakeholders. B2B customers also usually have a lot higher LTV
(life-time-value) than B2C customers. The pool from where a B2B business can draw new
customers is also smaller. To overcome all these adversities and challenges, an effective sales
cycle has to be in place and also an efficient metric analysis process to understand if the sales
team is performing well.esses throughout the financial supply chain.
 References:

[1] MR Fellenz, C Augustenborg, M Brady and J Greene Working Capital

Management, Oxford University Press, Oxford.

[2] Ronald H. Ballou “Financing the Chain,” International Commerce Review,

Vol. 10 (1), pp. 32-44, March 2011.

[3] Grosse-Ruyken, P.T.,Wagner, S.M. and Jönke, R. , “Supply Chain Finance:

Gaining control in the face of uncertainty,” Aberdeen Group, January 2011.

[4] Billington, C., Johnson, B., and Triantis, A., ‘‘A Real Option Perspective on
SupplyChain Management in High Technology.’’ Journal of Applied Corporate Finance
15(2):32–43.

[5] Yang, S.A. and Birge, J.R , ‘‘Choosing Between Single and Multiple Sourcing.
Based on Supplier Default Risk: A Real Options Approach.’’ Journal of purchasing and
Supply Management 16(1):27–40.

[6] https://economictimes.indiatimes.com/definition/accounts-receivable

[7] https://www.highradius.com/about/company-overview/

[8 ] https://blog.gobonafide.com/bid/135483/what-is-a-sales-cycle-and-why-is-it-
important
 Acknowledgements

I would like to take this opportunity to thank all my sources of inspiration during the course of
the internship.

First and foremost, I express my deepest gratitude towards my mentors at KIIT

Bhubaneswar, for his valuable suggestions, insightful criticisms, and directions throughout. I
am grateful to Ms. Kanika Jain and Mr. Anupam Sarda, who gave an opportunity to work
on projects at HighRadius Technologies and for their continuous support during the internship
and for their patience, motivation and immense knowledge. They helped us and guided us
throughout the internship and development.

I hereby take the privilege to express my gratitude to all the people who directly or indirectly
involved in the execution of this work without whom this internship would not have been a
success.

I am also thankful to my seniors and team leads for their valuable guidance, support, and
cooperation extended by them. Then I would like to thank my project team members for their
kind cooperation, help and never-ending support.

I am also thankful to KIIT Bhubaneswar for providing me technical skills and facilities
which proved to be very useful for our internship.

APRIL 2019 ALISHA ALI

KIIT, BHUBANESHWAR 1501005