How to use approvals in your CPQ-tool to boost profitability and reduce risk
Oct 12, 2023

How to use approvals in your CPQ-tool to boost profitability and reduce risk

Read this blog post to learn how use approvals in your CPQ to effectively and securely drive deals through your sales funnel

The Complexity of Approvals in the CPQ Landscape

In the ever-evolving world of Configure, Price, Quote (CPQ) systems, the approval process is more than just a mere formality. It's a critical component that ensures pricing accuracy, maintains profit margins, and upholds organizational standards. But with diverse offerings, customer needs, and deal sizes, a one-size-fits-all approval approach simply doesn’t cut it. Businesses require a flexible system that accommodates attestations based on factors such as the total offer sum or specific terms and conditions.

Three Key Steps Guided by Approvals

In the CPQ process, there are three pivotal stages where approvals play an essential role:

  1. Configuration: This foundational step determines which products and services pair together. Guided approvals ensure that salespeople are putting together comprehensive solutions, avoiding incompatible combinations or missing out on critical components.
  2. Pricing and Discounts: After the configuration, pricing becomes central. Approvals at this stage ensure that any discounts offered are within allowable ranges and that the overall pricing adheres to the company's margin objectives.
  3. Terms and Conditions: This encompasses the conditions that will govern the sale, from payment terms to delivery timelines. Guided approvals ensure that any unique terms proposed are in line with the organization's operational capabilities and risk thresholds.

Distinguishing Between Guided Approvals and Approval Flows

Within a CPQ system, there are two primary mechanisms for ensuring the right oversight:

  1. Guided Approvals in the UI: Integrated directly into the user interface, this ensures sales representatives are guided through the necessary approvals at each of the three stages. If a certain criterion isn't met, the system prevents progression until compliance is achieved.
  2. Approval Flows: These are dynamic processes tailored to the specific parameters of a deal. Whether it's the offer sum, unique configurations, or specific terms and conditions, these flows direct a quote to the relevant stakeholders for review and sign-off.

Why Different Deals Demand Different Approvals

Different scenarios require varying levels of scrutiny. For instance, a small deal with standard terms contrasts significantly with a large, bespoke offer for a major client with specialized conditions. The latter would understandably need a more rigorous review process, possibly involving senior management or the legal team.

Terms and Conditions: A Different Approval Beast

Beyond the quantifiable offer sum, terms and conditions introduce a qualitative challenge. Special warranties, extended payment terms, or unique delivery conditions might necessitate specialized reviews. Here, departments beyond sales, such as legal or finance, become pivotal. A sophisticated CPQ system will recognize these unique terms, ensuring they are routed to the right department for thorough review.


In essence, a well-structured CPQ system ensures both agility and robustness, seamlessly handling a variety of approval needs throughout the quoting process without compromising on efficiency or oversight.

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