How to add CPQ functionality to Business Central and create beautiful proposals in no time

When it comes to ERP solutions, few products can match the power of Microsoft Dynamics 365 Business Central.

Designed for SMBs, it helps them manage their finances, production activities, order shipping, service delivery, and more.

However, as luck would have it, the solution is not all-around perfect.

Some aspects, such as product configuration and proposal generation, can be substantially improved — and we intend to show you how.

Key takeaways

• CPQ functionality is essential for enabling sales teams to quickly create accurate quotes for complex products with dozens or even hundreds of components that are conditionally compatible or would otherwise be mutually exclusive.

• Business Central is one of the most feature-rich ERPs on the market; however, it falls short of advanced CPQ and document management functionality out of the box.

• The CPQ side of Business Central can be expanded with the help of dozens of commercial CPQ solutions.

• Business Central can be integrated with Dynamics 365 Sales for fast, automatic data synchronization between the ERP and CRM systems.

• Sales teams can leverage the power of specialized proposal generation and document management software to convert Dynamics quotes into great-looking proposals that can be easily sent, modified, and tracked from a single interface.

• The best document management systems come with built-in eSigning and payment capabilities, among other powerful and useful features.

Does Business Central have CPQ features at all?

It does, in a way.

Business Central comes with a BOM (Bill of Materials) configuration module, which can be treated as a basic CPQ tool tailored to the needs of manufacturing teams picking orders from the ERP.

With this default BOM manager, sales reps can create multi-component products or use an existing pre-configured product to add extra options to it for product variations.

However, truly complex products and the sales process associated with them require more than the basic BOM management features of Business Central. 

See also

4 CPQ best practices to optimize your sales cycle

In order to address these issues and introduce guided selling, you’ll need to use third-party CPQ tools to enable the sales team to use visual guides based on complex rules, triggers, exceptions, and other logical elements.

Standard quote creation vs. CPQ-based

There are two ways to create quotes for configurable products in Business Central.

Standard quote creation

The first one relies on standard features and tools:

1. First, you manually create assembly BOMs for your configurable items — for example, different sets of furniture.

You do that by combining an arbitrary number of components within a single parent item.

2. Once your products are configured, you can add them to a sales quote.

Note

Simple selection of products from a preconfigured catalog is a fairly standard process that can often be found in different types of sales software, including sales automation platforms like PandaDoc, for example.

• Open an opportunity and create a quote from there to have all the necessary fields pre-filled automatically

• Alternatively, create a sales quote from anywhere else and fill in the required fields

• When the quote is created, scroll down to your line items and add the necessary product assembly

3. Once your sales quote is ready, you can send it to the customer for review and approval.

CPQ-based quote creation

The second method is far more advanced in terms of product configuration capabilities and supports powerful techniques such as guided selling, which can bring enormous value to your entire sales team.

However, it requires a third-party CPQ solution to be integrated with Business Central.

There are quite a few of them on the market, including those featured in Microsoft AppSource.

For example, consider some of the following options:

• Experlogix CPQ

• Elfsquad CPQ

• ConfigureNow!

All of them enable you to build a flexible and easy-to-follow product configuration workflow with visual guidance and configurable logic.

Depending on your product of choice and preferences, your sales reps and even your customers will be able to create complex product configurations using a convenient visual interface with prompts, suggestions, and instant cost and item updates.

As a result, the CPQ will automatically create a detailed quote and, if necessary, generate assembly and production BOMs in Business Central to be processed further according to your workflow.

Breathing new life into your Business Central quotes

An accurate, detailed, informative quote is a good thing in and of itself, but presenting it the right way is a whole different story.

This could be a challenge that Business Central, with all of its power, may not be up to meeting fully, as its standard quotes can be impressively well-structured but fall short of style and visual appeal.

Fortunately, this problem can be solved as well.

If your organization happens to be using both Business Central (for financial operations and manufacturing) and Dynamics 365 Sales (for client relationship management and sales), the systems can be easily and natively integrated for two-way data exchange.

See also

Optimize your sales cycle with essential CPQ features

Once in sync, your CPQ quotes from Business Central become accessible in Dynamics 365 Sales.

From here, you can take advantage of third-party proposal generation software that seamlessly integrates with Dynamics and enables you to turn your standard quotes into beautiful, template-based proposals with document tracking, eSigning, and payment options included.

Bottom line

Microsoft Dynamics 365 Business Central is a powerful ERP solution whose product configuration capabilities can be taken to a whole new level by integrating it with a third-party CPQ tool for guided selling, managing products with multi-level hierarchies, configuring complex discount and compatibility rules, and much more.

On top of that, integrating Business Central with a proposal management platform will substantially improve the quality of your business proposals, leading to higher conversion and a much improved customer experience.