Here is a helpful glossary of quote-to-cash acronyms you will hear in the Salesforce Ecosystem.
|Annual Contract Value
|The annual revenue generated from each customer contract, each year.
|Annual Recurring Revenue
|The annual revenue generated from all customer contracts (ie. the company-level revenue), a metric used by subscription-based businesses (such as those offering SaaS – software as a service).
|Contract Lifecycle Management
|CLM tools manage the complexities of the contract lifecycle: the creation of the contract itself, which can range from a simple, single-page agreement to a massive list of specifications and amendments. Then you have the negotiation process and the approval process. And finally, you must manage the post-approval period, which generally consists of administering the contract, enforcing terms, and data reporting (source).
|Configure Price Quote
|CPQ tools enable sales teams to quickly and accurately generate quotes. Salesforce CPQ is an add-on product that sits on top of Sales Cloud. There are multiple CPQ tools that can be integrated with Salesforce.
|Commonly used for quoting with multiple years/terms/segments where you may have a ramp-up in price over the course of the segments and/or a ramp-up in the quantity of the product being sold.
|Stock Keeping Unit
|“A unique number assigned by a retailer to items in their inventory” (source). A SKU in the computer system ties directly to a physical product through a bar code.
|Total Contract Value
|The total revenue generated from each customer contract, for all years. For example, a 3-year contract with $1 mil ACV will be $3 mil in TCV.