Salesforce CPQ and Billing Licensing Playbook
Salesforce’s Configure-Price-Quote (CPQ) and Salesforce Billing solutions are key components of the Quote-to-Cash process. They enable companies to streamline how they configure products, generate quotes, and manage billing and invoicing within the Salesforce platform.
For CIOs, understanding the licensing models of these add-ons is crucial to optimizing costs and ensuring the right users have access.
This section provides a comprehensive overview of how Salesforce CPQ and Billing are licensed, offers guidance on estimating and allocating licenses among user groups, provides strategies to optimize license usage, and highlights important considerations for budgeting and integrations.
The tone is professional and advisory, akin to a Gartner report, focusing on actionable insights for organizations of all sizes and industries.
Salesforce CPQ Licensing Overview
What is Salesforce CPQ?
Salesforce CPQ (Configure, Price, Quote) is an add-on product for Salesforce that extends Sales Cloud capabilities with advanced quoting tools. It allows sales teams to configure complex product bundles, apply pricing rules and discounts, and generate professional quotes. Licensing Model: Salesforce CPQ is licensed as a per-user add-on to Salesforce CRM.
This means that any user who needs to access CPQ functionality must have a base Salesforce license (e.g., a Sales Cloud or Service Cloud user license) plus a CPQ add-on license assigned to them.
In practice, CPQ licensing is provisioned through a “CPQ User” permission set license, which you assign to specific users in your organization who require those features. The CPQ license is purchased separately from the standard CRM licenses.
Editions and Cost: There are typically two editions of the CPQ add-on: Standard CPQ and CPQ+.
- Standard CPQ provides core configuration, pricing, and quoting capabilities, including product configuration rules, basic pricing and discounting, and the generation of quotes. It is generally the more affordable option; Salesforce’s list price is around USD 75 per user per month, billed annually, for standard CPQ.
- CPQ+ includes all Standard CPQ features plus advanced functionality such as increased process automation, advanced approvals, guided selling, and support for more complex use cases. CPQ+ is roughly twice the cost of standard CPQ, with a list price of around $150 per user per month. It’s designed for organizations that need more customization and automation in their quoting process.
Salesforce often bundles CPQ as part of its Revenue Cloud offering. For example, “Revenue Cloud” licenses (approximately $200 per user per month) may combine CPQ (often CPQ+) with other Quote-to-Cash components. It’s essential to note that exact pricing and packaging can vary, and volume discounts or promotions may be available – CIOs should consult their Salesforce account representatives for tailored pricing.
Also, Salesforce typically requires a minimum number of CPQ licenses to be purchased (often a 10-user minimum for add-on products), which is an important consideration for smaller teams.
Who Needs a CPQ License?
Not every Salesforce user will require a CPQ license – only those who actively use CPQ features. Salesforce CPQ is a named-user license, meaning it must be assigned to specific individuals. These are usually users involved in creating or editing quotes and configurations. Users without a CPQ license cannot use the CPQ package features, including the Quote Line Editor, CPQ product configurator, and CPQ-generated quote documents.
They may still use standard Salesforce opportunities and view quote PDFs, but they won’t be able to create or edit CPQ quotes. In summary, CPQ licenses are typically needed for:
- Sales Reps who generate quotes: Any sales representative or account executive who configures products, applies pricing, and creates quotes in Salesforce should have a CPQ user license. This is often the primary group of users for CPQ. If a sales rep never creates quotes in the system (perhaps they sell only standard SKUs with fixed pricing or have inside sales support to do it), they may not need CPQ access.
- Sales Operations & Pricing Teams: Users in sales operations, revenue operations, or pricing analyst roles often need CPQ licenses. They might be responsible for maintaining product and pricing rules in CPQ, assisting sales reps with complex quote configurations, or handling special cases. These “power users” are often CPQ experts and need full access.
- Solutions Engineers/Quote Specialists: In some organizations, a subset of users, such as solutions engineers, deal desk specialists, or quote analysts, handles the configuration and quoting for salespeople. These users need CPQ licenses, as they act as power users, configuring quotes on behalf of others.
- Administrators and Developers (for CPQ): Your Salesforce admins or dedicated CPQ administrators will require a CPQ license to configure the CPQ package (setting up product bundles, price rules, quote templates, etc.) and troubleshoot as needed. They might not be “sales reps,” but they need access to system configuration and testing. Often, only a small number of these licenses are needed, just for the admins who work on CPQ.
CPQ vs. Standard Salesforce Quotes:
It’s worth noting that Salesforce’s base Sales Cloud includes a simpler quoting tool, consisting of the standard Quote object and PDF quote templates. Some sales teams use that for basic quotes without needing CPQ.
CPQ, however, is far more powerful and is designed for complex quoting scenarios, such as multi-product configurations, subscriptions, usage-based pricing, and complex discount rules.
Because CPQ is an add-on license, deploy it only to users and scenarios that truly warrant its advanced capabilities. Simpler deals or users could continue using the standard quoting features or other manual processes if that is sufficient – this can reduce the number of CPQ licenses required.
CPQ License Enforcement:
Salesforce manages CPQ as a managed package (formerly known as SteelBrick CPQ). In recent releases, Salesforce enforces CPQ access via a permission set license, meaning a user must be explicitly licensed to use CPQ features. This ensures compliance – unlicensed users generally cannot work around the system to use CPQ.
From a CIO’s perspective, this is good for governance: you assign licenses to the right people, and you don’t accidentally give access to someone without a purchased license. It also means that if you have more users needing CPQ in the future, you’ll need to purchase and assign additional licenses accordingly. Users cannot share a license; it’s a per-named-user license.
Industry Update: As of 2025, Salesforce has begun evolving its CPQ offering. The legacy Salesforce CPQ product, the managed package, is entering an “End of Sale” phase for new customers. Salesforce is introducing Revenue Cloud Advanced (a new, natively built CPQ and quote-to-cash solution) as the future path alongside Revenue Cloud Billing for billing.
However, current Salesforce CPQ customers will continue to have full support and can renew or add licenses as we advance. The licensing principles discussed here still apply to current CPQ licensing. CIOs should be aware of this roadmap: while new Salesforce customers may be sold the new Revenue Cloud products, those already invested in CPQ can continue to use their existing solutions.
Salesforce will allow additional CPQ user licenses as needed. This means your CPQ licensing strategy remains relevant, but it’s also important to stay informed about Salesforce’s product evolution in the quote-to-cash space. (The new offerings are expected to have similar user-based licensing models, though potentially with different bundles or pricing.)
Estimating the Number of CPQ Licenses Needed
Determining how many CPQ licenses your organization needs (and of which type) requires an understanding of your sales process and user roles. A careful assessment can prevent over-purchasing licenses or, conversely, under-provisioning and hampering your sales workflow.
Here’s how to estimate the appropriate number:
1. Identify User Personas and Usage Patterns: Start by segmenting your user base into categories based on how they will interact with the quoting process.
Common personas include:
- Power Users/Heavy Users: These are users who create or modify quotes daily. They handle complex product configurations and custom pricing and often drive the quote-to-order process. This group typically includes sales ops specialists, deal desk analysts, or senior sales reps for complex deals. Estimate: This might be a relatively small percentage of your sales organization (for example, around 10-20% of the sales team), but they will need continuous access to CPQ.
- General Sales Representatives: These users manage opportunities and occasionally need to generate quotes. Perhaps their quotes are straightforward or infrequent. Some in this category may use CPQ directly as needed, while others may rely on power users or standard tools for quoting. Estimate: This could be the majority of your sales team. You need to decide if each of these reps gets a CPQ license or if only some do. Often, if their quoting needs are simple (e.g., selling standard products at list price), you might opt not to license all of them with CPQ and instead use simpler methods for those scenarios.
- Sales Managers and Approvers: Managers may need to review or approve quotes. Typically, approving a CPQ quote (via Salesforce’s approval workflow) does not require the manager to have a CPQ license if they only click “Approve.” Approvals can be made through email or with basic record access. However, if managers need to review quote details, adjust configurations, or generate revisions themselves, they will require a CPQ license. In many cases, managers do not need their own CPQ license if their involvement is limited to approval steps, as the system can notify them and they can approve without needing to edit the quote.
- Operations and Admin Users: As mentioned, Salesforce admins or sales operations team members who maintain the CPQ system need licenses. Usually, this is a small fixed number (e.g., your CPQ admin, maybe a backup admin, and perhaps a pricing manager who updates price books). These should be accounted for in your license count.
By identifying these groups, you can count roughly how many users fall into each category. For example, you might find that you have 50 sales reps, but only 20 of them create quotes frequently (the others sell simpler products or have internal support).
You might then plan to purchase around 20 CPQ licenses for those reps, plus a few for ops and admins, rather than 50 for everyone. It’s common to start with a subset of users in the initial deployment and expand if needed.
2. Analyze Quoting Volume and Complexity:
Look at how often quotes are produced and how complex they are. If every deal requires a formal quote with configured products, then most reps will need CPQ access. If only large deals or special product lines require CPQ, you might license those specialists and have others route requests to them.
For instance, in a manufacturing firm, perhaps only the custom orders team uses CPQ, while standard orders are handled with a simpler process. Estimate the volume of CPQ usage – if occasional, a smaller pool of licenses might suffice (with users sharing the quoting responsibility or taking turns – though remember, sharing a license login is not allowed, but sharing the responsibility means one licensed user can assist multiple unlicensed reps).
3. Consider License Types for Each User:
If your organization has varying needs, you may even mix CPQ license types. For example, you might purchase a handful of CPQ+ licenses for power users who need advanced features (such as complex discount rules and advanced approvals) and use standard CPQ licenses for those with basic needs.
Salesforce allows mixing license types in the same organization, as the CPQ package can assign different permission set licenses to each user. This can be a cost-effective approach: not everyone may need the more expensive CPQ+ capabilities. Be sure to match the license type to the user’s role:
- Standard CPQ might suffice for reps who configure products and generate quotes within predefined rules.
- CPQ+ might be warranted for your CPQ admin or a pricing specialist who configures complex pricing rules, or for users who handle the most complex deals, such as large enterprise contracts that require specialized approvals or amendments.
4. Account for Growth and Flexibility:
Plan for the future – if you anticipate more users needing quoting capabilities (e.g., business growth or expanding CPQ to additional divisions), factor this into your estimate. It might be cost-effective to license a few extra users from the outset if you’re negotiating a large contract to secure a better discount.
Conversely, if you are unsure about adoption, you might start with a smaller number of licenses and add more later as usage increases. Keep in mind that additional licenses will be at the current prices, which may be higher or lower depending on your contract terms. Many CIOs negotiate the ability to true-up licenses mid-term at a predetermined rate.
5. Leverage Usage Data (if available):
If you already have CPQ in use and are re-evaluating license counts, examine usage logs or reports. Identify how many unique users created quotes in the past quarter, for example, and how frequently. You may discover that some licenses are assigned to users who rarely use CPQ – those might be candidates for removal or reallocation to others. Monitoring license utilization helps in refining the number needed.
In summary, estimate the number of CPQ licenses by aligning with the people who need the CPQ functionality. It’s often a subset of your total Salesforce user base. A common pattern might be: “license the core quoting users and leave occasional or light users unlicensed (or serve them via other means).”
In the next section, we discuss how to serve those unlicensed users and optimize license assignments.
Optimizing CPQ License Assignments and Usage
Once you have determined which users require CPQ, the next challenge is optimizing license assignments to maximize value while minimizing waste.
Here are strategic approaches CIOs can use to optimize CPQ license usage:
- Limit CPQ to Power Users and Specialists: One effective strategy is the “Sales Quoting Desk” concept – rather than giving every sales rep a CPQ license, a company can designate a team of CPQ power users (for instance, sales operations specialists or solution engineers) who handle quote configurations for the broader sales team. In this model, a sales rep without a CPQ license would submit their deal requirements to the quoting desk (or collaborate with a licensed team member), then use CPQ to configure the product, apply pricing, and generate the quote. The quote document or details can then be passed back to the rep for presentation to the customer. This approach means you might only need CPQ licenses for that specialized team, plus perhaps team leads or representatives handling complex deals, significantly reducing the total license count. This is especially useful in organizations where most quotes are routine, and only a few are complex – the complex ones get routed to experts with CPQ. The trade-off is potential process latency (an extra step for the rep to get the quote), but many organizations find the cost savings worthwhile. It can also improve quote quality, as experts prepare them.
- Use Standard Tools for Simpler Quotes: As noted earlier, Salesforce’s standard quoting or manual methods, such as Excel or price books, can handle simple quotes. For deals that involve just a few standard products or fixed pricing, you might have reps use the built-in “Opportunities + Products + Quote PDF” in Salesforce (which does not require a CPQ license) or another lightweight quoting app. Reserve CPQ for deals that truly need advanced features. By implementing a tiered process (simple deals vs. complex deals), you ensure that only those deals that need CPQ go through CPQ. Over time, you can refine criteria – for example, “If a deal has more than 10 line items or requires non-standard pricing, it goes through a CPQ user; otherwise, the rep can quote via standard tools.” This reduces the load on CPQ users and the need for every rep to be trained and licensed on CPQ.
- Train and Rotate Licenses if Necessary: In some cases, you may choose to license a subset of sales representatives for CPQ, such as those in specific regions or product lines, but not others. Ensure those who are licensed are well-trained “super users” who can both use CPQ effectively and perhaps assist their peers. If organizationally feasible, you can also rotate which individuals have CPQ access as needed. (Salesforce licenses are assigned to named users, but you can reassign a license if a user leaves or changes roles. You cannot dynamically swap licenses among active employees on a day-to-day basis due to the named user model, but you can transfer licenses as needed over the long term. For example, if a particular team only needs CPQ for a seasonal product launch, you could assign licenses during that period and reassign them afterward. This requires careful planning and isn’t usually a frequent practice, but it’s a way to stay flexible without overbuying permanent licenses for everyone.
- Mix License Types for Cost Efficiency: As mentioned, consider mixing CPQ and CPQ+ licenses. Perhaps only your CPQ administrator and a few senior users truly need CPQ+ (for things like Advanced Approvals or the upcoming Billing integration). At the same time, the rest can operate with standard CPQ licenses. This mix ensures that advanced functionality is available where needed, without paying the higher price for every user. Verify with Salesforce that your contract allows a mix and that your organization’s feature configuration supports a mixed environment. Generally, it does. Features not available to a standard CPQ user will not be accessible to them, but that might be fine if those features are not relevant to their role.
- Leverage Partner Community for External Users: If you have external parties (e.g., channel partners, resellers) who need to create quotes, do not use internal CPQ licenses for them. Salesforce offers CPQ for Partner Communities licenses, which are a specific type of license designed for external users accessing CPQ through a partner portal. They are priced differently, typically at a lower cost per partner user or login. This can significantly save costs if you otherwise consider giving partners full Salesforce licenses. Instead, deploy a partner community with CPQ enabled for partners. That way, your partners can independently configure and quote your products, and you only pay community-based pricing (e.g., roughly $25 per member or $10 per login per month for partner CPQ access, as per Salesforce’s pricing). This approach keeps internal license counts focused only on employees. Similarly, suppose you want end-customers to self-serve quotes (although this is less common, some B2B companies do allow customers to configure a quote in a portal). In that case, Salesforce also offers CPQ for Customer Communities licensing, which is priced separately. The key point for CIOs is that internal CPQ licenses should be reserved for employees, and external use cases should be handled via community licenses – a more scalable and cost-effective approach.
- Monitor Usage and Revoke Unused Licenses: It’s a best practice to periodically review who has CPQ access and whether they are actively using it. Salesforce does not automatically reclaim unused licenses – it’s up to your admin team to manage. If you find, for example, that some sales reps haven’t created a single quote in months, consider removing their CPQ license (you can always assign it back later if their role changes). Perhaps their territory or role doesn’t need CPQ after all. Reassigning those licenses to another user who does need it (or reducing your license count at renewal time) will optimize costs. Additionally, if an employee with a CPQ license leaves the company, you should promptly deactivate that user and free up the CPQ license for someone else – this avoids “shelfware.”
- Optimize through Process Changes: Beyond technical license assignment, consider process changes that reduce the need for licenses. For example, implementing guided selling for reps without CPQ, such as a simple configurator outside of Salesforce or a request form that feeds into CPQ for users, can allow unlicensed reps to initiate a quote without needing direct CPQ access. Automation can also help: if some quotes can be auto-generated based on standard criteria, the rep can trigger a flow that runs within a system context. (Note: Typically, an interactive CPQ quote creation requires a user license, but automation or templated quotes can reduce manual usage.) While you can’t have the system fully utilize CPQ without a user behind it, you may reduce the number of people who need to manually interact with CPQ.
- Negotiate for Bundles or Enterprise Agreements: From a cost-optimization standpoint, if you anticipate a large number of CPQ users, consider negotiating with Salesforce for bundled pricing. For instance, bundling CPQ licenses with your Sales Cloud renewal or purchasing Revenue Cloud (which combines CPQ and billing) could yield discounts compared to purchasing them separately. Enterprise license agreements (or Salesforce’s “Unlimited” bundles for certain products) might give more flexibility if you have a very large user count. The CIO and procurement team should approach Salesforce with a clear ask to optimize license cost per user. In some cases, Salesforce may offer promotions, such as several free CPQ licenses with a large sale of Sales Cloud. (This depends on timing and sales incentives on their side.)
When implementing these strategies, strike a balance between cost savings and sales efficiency. The goal is not to starve the sales team of needed tools – it’s to target the licenses where they produce the most ROI. Always get feedback from the field: if reps without CPQ access are struggling or delaying deals, it may be worth licensing them.
The strategies above should be calibrated to your organization’s size and complexity. Small businesses might license all sales users on CPQ if the absolute count is low, whereas a large enterprise might be more selective to avoid six- or seven-figure cost spikes.
Salesforce Billing: Capabilities and Licensing
Salesforce Billing is often mentioned in the same breath as CPQ, as it continues the Quote-to-Cash cycle beyond quote generation. What is Salesforce Billing? It is an add-on module that works in conjunction with Salesforce CPQ to manage the “cash” side of quote-to-cash – in other words, Billing takes a confirmed order or contract (often originating from a CPQ quote) and handles invoice generation, payment processing, and related financial processes on the Salesforce platform.
With Billing, companies can create invoices directly from opportunities or orders, track invoice line items, apply taxes, record payments, and even perform revenue recognition for subscription or usage-based products, particularly with its advanced edition.
Essentially, Salesforce Billing extends Salesforce into a quasi-ERP for the accounts receivable function. This is highly useful for companies that want a more seamless connection between sales and finance, especially for subscription businesses or any business that bills customers in a recurring or usage-based model.
How Salesforce Billing is Licensed:
Salesforce Billing is licensed as an add-on, similar to CPQ, and requires CPQ to be already in place. (Salesforce Billing was historically an extension of the CPQ package – often, you needed the CPQ+ license to use Billing features.)
In current Salesforce packaging, Billing is part of the Revenue Cloud family and comes in tiers, commonly named Billing Growth and Billing Plus:
- Billing Growth: This is the base edition of Salesforce Billing, offering core order-to-cash capabilities, including invoicing, payments, and basic subscription billing. Salesforce typically does not publish a fixed price for this – it’s available “by quote” from Salesforce. Billing Growth is suitable for organizations with standard billing needs. It is often bundled or custom-priced based on factors such as the number of customers, invoice volume, or the number of users in the billing department who will use the system.
- Billing Plus: This is the higher tier that includes all of Growth Plus advanced features like usage-based rating (ability to bill based on usage records – good for telecom, SaaS consumption models, etc.) and revenue recognition capabilities (helping you recognize revenue according to accounting standards, which is crucial for subscription services under rules like ASC 606). Billing Plus is also “contact for pricing,” indicating it’s typically more expensive and targeted at enterprises with complex billing models.
Salesforce often positions these Billing licenses in tandem with CPQ+. In many cases, customers who buy Billing will opt for the Revenue Cloud bundle. For example, instead of buying CPQ+ ($150 per user per month) and then billing separately, one might purchase a Revenue Cloud license (~$200 per user per month) that includes both.
The exact packaging can vary; some deals might list CPQ+ and Billing as separate line items, while others might show “Revenue Cloud” as a combined license. Importantly, users of Salesforce Billing will also need base Salesforce licenses and, likely, CPQ licenses if they perform quoting as well.
If a user is solely in finance and only deals with invoices, they may not need a CPQ user license, but they will need at least a Salesforce Platform or CRM license, plus the Billing permission.
Typical Users for Billing:
Determine who in your organization will use Salesforce Billing. Common personas:
- Finance/Accounts Receivable Staff: These are users in the finance department who manage invoices, record payments, handle refunds or credits, etc. They will need Salesforce access to use the Billing objects. Often, this might be a handful of users (e.g., billing specialists or accounting clerks).
- Subscription/Revenue Operations: In a subscription business, a revenue operations team member might oversee billing schedules, renewal billings, and revenue recognition. They, too, would require Billing licenses to manage those processes in Salesforce.
- Sales or Customer Support (limited): Sometimes, sales representatives or customer service representatives may need to view billing information to answer customer questions (e.g., “Has the invoice been paid?” or “What is the next billing date?”). Typically, viewing invoice status can be achieved through integration, such as syncing a status field back to the opportunity or account, which avoids the need for every rep to have full Billing access. But suppose your process involves salespeople generating or adjusting invoices (for example, initiating a one-off billing for additional products after an upsell). In that case, those sales users might also need Billing licenses. This is less common; most organizations keep billing tasks with Finance, but it depends on your workflows.
Integration with CPQ:
Salesforce Billing doesn’t operate in a vacuum – it’s tightly connected to CPQ. The usual flow is: a sales user creates a quote via CPQ, which is finalized as an order or contract. Salesforce Billing then converts that into an invoice schedule and actual invoices. Thus, Salesforce Billing almost always requires that you have Salesforce CPQ (specifically CPQ+) enabled for the org.
Earlier, Salesforce pricing indicated “CPQ+ with Billing – custom pricing,” implying that Billing was sold as an add-on to CPQ+. From a licensing standpoint, you might see that only CPQ+ licenses can be used for Billing functionality (so if you had only standard CPQ, you would likely need to upgrade those users to CPQ+ to use Billing).
This is a detail to clarify with Salesforce when planning. Often, if a customer decides to implement Billing, Salesforce will bundle CPQ+ licenses as part of that deal, if the customer isn’t already on CPQ+.
Licensing Impact on Users:
If your finance team was not on Salesforce at all previously, adopting Salesforce Billing may mean adding new Salesforce users from that department. These could be full Salesforce licenses or Salesforce Platform licenses, depending on whether those users need the full CRM functionality.
(A Platform license allows access to custom objects like the Billing objects and some standard ones like Accounts; it can be a cheaper way to license users who only use Salesforce for billing and not for sales or service functions.)
This is an important budgeting consideration: bringing Finance onto Salesforce could increase your total number of Salesforce users. However, it might let you sunset another billing system or reduce manual work, which is part of the ROI trade-off.
Capabilities Added by Billing:
To articulate the value (for context): Salesforce Billing enables the creation of invoices directly from orders, automates payment collection (it can integrate with payment gateways for credit card processing, etc.), handles proration and milestone billing for projects, and can manage subscription renewals and amendments from a billing perspective.
It can post transactions to general ledger systems through integration and has tools for revenue recognition, especially in Billing Plus, which aligns with accounting rules for recognizing deferred revenue over time.
Essentially, it brings many ERP-like billing capabilities into the Salesforce environment. For a CIO, this means potentially simplifying the application landscape by using Salesforce for both CRM and some ERP functions – but it also means Salesforce becomes even more mission-critical and heavy-duty.
Integration and System Implications (CPQ & Billing with ERP/CRM)
When implementing Salesforce CPQ, especially Billing, one must consider how these modules will integrate with the broader IT landscape, including existing ERP systems, finance systems, and other CRM processes.
Some key implications and best practices:
- ERP Integration Strategy: Most medium to large enterprises already have an ERP or financial system (e.g., SAP, Oracle ERP, NetSuite) that handles orders, invoicing, and revenue accounting. Introducing Salesforce Billing raises the question: do you replace some ERP functionality with Salesforce or integrate between them? There are two common patterns:
- Salesforce CPQ + External ERP Billing: In this scenario, Salesforce CPQ is used to configure quotes and possibly generate an “Order” record, but the actual invoicing is handled in the ERP. Companies choosing this path might not purchase Salesforce Billing at all; instead, they use integration to send CPQ outputs, such as orders or contracts, to the ERP, which then issues invoices. This avoids Salesforce Billing license costs but requires a robust integration (using middleware or APIs) to ensure the order data flows correctly,y and any invoice or payment status can flow back to Salesforce for sales to see. Many companies initially adopt CPQ and stick with their existing billing system for this reason. CIOs should ensure that the integration covers key data points, such as customer information, order line items, pricing, invoice numbers, and payment status, so that Salesforce users can still track the status of deals after the quote.
- Salesforce CPQ + Salesforce Billing + ERP: Here, Salesforce CPQ and Billing manage the quote and invoice processes. However, the ERP is still used for financial reporting or as the system of record for financial transactions. In this model, Salesforce Billing might handle invoice creation and possibly collect payments, especially for credit card payments or ACH debits, if integrated with gateways. However, the finance team likely still needs those records in the ERP for general ledger entries, consolidating financials, and so on. Thus, integration is used to sync invoice and payment data from Salesforce to the ERP. Essentially, Salesforce becomes the front end for order-to-invoice, and the ERP receives the completed invoice data for accounting purposes. The integration could be batch or real-time, depending on requirements. A possible approach is to use Salesforce’s own MuleSoft or other integration middleware to post invoice records to the ERP as they are generated or as they are marked as paid.
- Data Consistency and Master Data: Integration means you must decide which system is the master for certain data. For example, product catalog and pricing: With CPQ, product and price data are maintained in Salesforce. If an ERP also has a product catalog and price lists, you’ll need processes to keep them in sync. Alternatively, you can decide to manage pricing solely in Salesforce to avoid discrepancies. Another example is customer accounts: typically, your Salesforce Account will correspond to a customer record in ERP. Integration should ensure that when an invoice is created in Salesforce Billing, it is linked to the correct customer ID in the ERP. Many companies use an Integration ID or global customer ID to map records between systems. CIOs should enforce strong data governance here – the last thing you want is mismatched data, causing billing errors or double-entry.
- Process Alignment: Adopting Salesforce Billing may require rethinking some processes. For instance, how do credit notes or refunds get handled? Salesforce Billing can create credit memos, but your finance team might be used to doing that in ERP. You may need to decide whether to shift those processes into Salesforce or keep them in the ERP and integrate the results. The more you leverage Salesforce Billing’s capabilities, the more you have to integrate or reconcile with finance. Some organizations choose a hybrid approach: use Salesforce for initial billing on subscription deals. However, for complex accounting adjustments, they still use the ERP and update Salesforce for customer-facing info.
- Impact on CRM Data and Performance: Integrating billing data into Salesforce means your CRM now stores a significant amount of financial transaction data, including invoices, invoice line items, payments, and more. This can increase data storage needs in Salesforce. Each invoice and payment is a record; if you bill thousands of invoices a month, that’s a significant amount of data over the course of the year. You may need to purchase extra data storage or use archiving strategies to maintain optimal performance. Additionally, the CPQ and Billing managed packages together add dozens of custom objects to your Salesforce org. CPQ alone can add over 70 objects, including quotes, quote lines, product rules, etc., and Billing adds many more for invoices, payments, and more. This increased object count can make the organization more complex to manage and may slightly impact performance, for example, due to more triggers or more data to query in reports. It’s advisable to perform performance testing, especially if you have high transaction volumes, and work with Salesforce to ensure you have appropriate governor limit allowances or any needed performance boosts (e.g., sometimes higher-end licenses or certain Salesforce infrastructure optimizations can be used for heavy Revenue Cloud usage).
- Integration with Tax and Payment Gateways: Don’t forget that billing often requires calculating taxes (VAT, sales tax) and processing payments. Salesforce Billing can integrate with tax calculation engines, such as Avalara AvaTax, and payment gateways, through solutions like Salesforce Payments or third-party solutions. These integrations may require licensing or fees. For example, using a payment gateway via Salesforce might charge a per-transaction fee. While not directly a Salesforce license cost, it’s part of the overall cost of running Salesforce Billing. Ensure these are budgeted and technically planned. The CIO should verify that adopting Salesforce Billing won’t inadvertently require duplicating a tax engine or compliance process that the ERP already handles. You may choose to call out to the same tax service from Salesforce to maintain consistency. Likewise, if your company already has a payment processing platform, integrate it with Salesforce rather than introducing a new one.
- CRM License Count Implications: As mentioned, adding Billing typically means adding users, such as finance users, to Salesforce. If those users only use Salesforce for billing, consider giving them a Salesforce Platform license (which tends to be lower cost than a full Sales Cloud license) along with the Billing feature license. Platform users can interact with custom objects, which Billing primarily uses, and core accounts and contacts. They wouldn’t have access to things like Opportunities or Cases unless explicitly needed. This can save money compared to giving each finance user a full Sales Cloud license that includes many functionalities they won’t use. However, if finance users need to see opportunities or reports that include opportunity data, you might still require full licenses. Another approach some take is to have a smaller number of “billing users’ who are licensed, and other finance team members rely on reports or exported data instead of logging in directly.
- System Reliability and Backups: With Billing in Salesforce, your sales platform now directly impacts revenue collection. Downtime in Salesforce could affect invoicing. CIOs should evaluate their Salesforce uptime (which is generally very high) and consider Salesforce’s premier support or a secondary plan for continuity, especially if invoices can’t be delayed. Additionally, data backup routines become important – invoice and payment data must be backed up and possibly stored in a financial data repository for audit purposes. Salesforce provides backup options (and third-party backup services exist). Ensure this is part of the plan so that billing data is never lost or inaccessible.
In summary, integrating Salesforce CPQ and Billing with your ERP or financial environment is a major consideration. Many companies proceed incrementally: first, they implement CPQ integrated with ERP, and only later add Salesforce Billing if they see the benefits.
Others moving to a more unified quote-to-cash might implement both and integrate ERP at the general ledger level. There is no one-size-fits-all, but the key is to avoid siloing financial data.
CIO best practice: involve both IT and Finance teams early to design the integration and data flows, and possibly do a trial run or parallel run of billing to ensure accuracy before fully switching on Salesforce Billing as the system of record for invoices.
Budgeting Considerations for CPQ and Billing
Adopting Salesforce CPQ and Billing can significantly impact your Salesforce spend and related budgets. CIOs should plan for both direct licensing costs and indirect costs, such as infrastructure or implementation expenses.
Here are the main budgeting factors to consider:
- Additional License Costs: By design, CPQ and Billing are add-ons to Salesforce and thus require a budget on top of your existing Salesforce subscription. CPQ licenses are charged per user. For example, if you plan for 50 CPQ users and Salesforce’s list price is $75/user/month, that’s $75 * 50 = $3,750 per month (about $45k/year) at list price, on top of your core CRM costs. CPQ+ at $150 would double that for those users. Billing is typically even more costly on a per-user basis; effectively, if bundled as Revenue Cloud, you might see something like $200 per user per month, covering both CPQ and Billing. It’s essential to get quotes from Salesforce for your specific needs; volume discounts or enterprise agreements can significantly reduce the per-user cost from list prices. Also, remember the 10-user minimum rule for these add-ons – even if you have only 5 users, you may still be required to pay for 10. If you’re a small business, negotiate if possible or factor the cost into your budget (e.g., you might assign those extra 5 to managers for occasional use, so they don’t go to waste).
- Negotiation and Contract Terms: When budgeting, consider the terms of your Salesforce agreement. If you are mid-contract and add CPQ or Billing, those might co-term to your contract end date. Salesforce may offer prorated pricing for the first partial year, but then lock in an annual rate. It can be advantageous to negotiate CPQ/Billing at the time of a big renewal or purchase to leverage better discounts. CIOs often use competitive situations or multi-product deals to get more favorable pricing. Also, ensure you negotiate price caps for future renewals, if possible, especially for these add-ons, which could otherwise escalate. Some companies also negotiate ramp-up clauses (e.g., in year 1, you pay for 20 users, and in year 2, for 30 users, as adoption grows, etc.), instead of paying all 30 from day one.
- Implementation and Maintenance Costs: While not licensing per se, implementing CPQ and Billing is a non-trivial project that can incur significant one-time costs, including consulting, integration development, and training. These costs should be budgeted alongside the licenses. Sometimes, Salesforce will include some implementation support, or you might use a Salesforce consulting partner. Additionally, maintaining CPQ (administering product changes, pricing updates, etc.) may require dedicated staff or admin time, effectively an ongoing cost. The complexity of CPQ & Billing might also mean you invest in a sandbox (testing) environment strategy; for instance, you may need a Full Sandbox (which can be an extra cost if not included in your edition) to adequately test CPQ/Billing changes due to their complexity.
- System Performance and Capacity: As mentioned, if Billing leads to high record volumes, you might need to purchase additional data storage from Salesforce. By default, Salesforce provides a certain amount of data storage (based on user count and base allocations). Large volumes of invoices and related records can consume a lot of space. Salesforce sells extra storage in blocks – include that in the budget if your volume projections exceed the default. Similarly, consider API call capacity when integrating heavily. Salesforce has limits on API calls per 24-hour period, which are usually sufficient. However, heavy integration or large batch jobs for billing could approach these limits, requiring an increase or an integration architecture that throttles appropriately.
- License Overlap and Optimization: Consider overlapping functionalities you may already be paying for. For example, if you have an existing CPQ tool (from a third party) that you’re replacing with Salesforce CPQ, the budget can be partially offset by canceling that other subscription. Or, if you bring billing onto Salesforce, you may be able to reduce costs on your old billing software or ERP module license. These offsets often justify the Salesforce investment but require coordination with finance to capture the savings, such as not paying for two systems that do the same job. Also, consider user license optimization, as discussed: for example, using a less expensive Salesforce Platform license for finance users instead of a full Sales Cloud license can save money. Platform licenses cost less but still allow those users to use the Billing objects. Work with Salesforce and an independent licensing expert if needed to ensure you’re using the right mix of license types.
- Renewal Impact and Long-Term Costs: Adding CPQ and Billing will increase the annual Salesforce spend, which will be subject to renewal uplifts. Salesforce typically has standard annual uplift percentages (often 7-10%) or ones tied to inflation. On a multi-year contract, you might lock in the price, but expect these add-ons to increase on renewal. Plan your IT budget accordingly for years beyond the first. Also, be mindful of the renewal co-term: If CPQ/Billing are co-terminous with your main contract, their renewal will coincide with your entire Salesforce renewal – this can result in a large lump sum payment. It’s strategic to start reviewing usage and negotiating well in advance of that date.
- Training and Enablement Costs: The success of the CPQ implementation (and hence the return on those license dollars) depends on user adoption. Budget for training programs to get your sales team and finance team comfortable with the new tools. This might include formal training sessions, documentation, and perhaps a “CPQ champion” program. While not a licensing cost, it’s part of maximizing the value of the licenses you’re buying. A poorly adapted CPQ implementation can lead to wasted licenses (people not using what you paid for) or parallel work in spreadsheets, defeating the purpose.
- Contingency for Additional Needs: Sometimes, the introduction of CPQ and Billing surfaces other needs that have cost implications. For example, after implementing CPQ, you realize you need a better e-signature solution for quotes or contracts – that might be another add-on (Salesforce has a CPQ extension for contract lifecycle, or you use an external tool like DocuSign). Or you find that to do advanced pricing, you want an add-on like Salesforce Pricing Guidance (an Einstein Analytics feature for CPQ). Keep a small contingency budget for extras that might enhance the CPQ or billing value. Not all organizations will need these, but awareness is key.
Working with Licensing Experts:
Given the complexity of Salesforce’s licensing and the significant expenditure that CPQ and Billing can represent, some CIOs engage independent licensing consultants for assistance. Firms (such as Redress Compliance, among others) specialize in analyzing your usage needs and Salesforce’s pricing structure to ensure you’re buying the right number and type of licenses at the best possible terms.
They can often identify savings – for instance, by pointing out if some users could use a different license type or if an unlimited-use agreement might be more cost-effective at your scale. They can also help in negotiations with Salesforce, bringing benchmarks from other clients. While this is an additional service cost, it can pay for itself if you’re considering a large license purchase.
The benefit is an unbiased perspective, since independent experts are not Salesforce resellers; they aren’t trying to sell you more, but rather to optimize what you buy. Engaging such experts is a strategic decision; it tends to make sense for larger enterprises or complex deployments where licensing spend is substantial.
At a minimum, CIOs should conduct an internal or third-party audit of their Salesforce license usage annually to ensure they are not over- or under-licensed, especially after adding CPQ or billing.
Real-World Examples of CPQ and Billing License Strategies
To illustrate the above points, here are a few hypothetical (but representative) examples of how companies structure their Salesforce CPQ and Billing licenses:
- Example 1: Mid-Market Manufacturing Co. – This company has 100 sales reps across various product lines. Their products can be custom-configured, but only a specialized team handles configurations. They purchase 20 CPQ+ licenses and assign them to a “Sales Ops Quoting Team” of 15 specialists and five senior sales reps who frequently do complex deals. These 20 users handle all quotes in Salesforce CPQ for the entire sales force. The other 80 sales reps do not have CPQ access. For a standard product quote, they use a simple built-in quote form or request one from a specialist. Sales management and approvals are handled via email, and standard opportunity approvals are used (no CPQ license is required for approvers). They decided not to license all 100 reps with CPQ to save cost, instead funneling the process through a smaller team. On the Billing side, Manufacturing Co. already has SAP handling billing and invoicing, so they did not purchase Salesforce Billing. Instead, they integrated CPQ with SAP: once a customer accepts a CPQ quote, an order is sent to SAP, which generates the invoice. This avoids extra Salesforce Billing licenses and keeps financial transactions in SAP as the source of truth, which the CFO is comfortable with. The budgeting trade-off is the cost of integration (they built a custom interface between Salesforce and SAP) rather than paying Salesforce for Billing.
- Example 2: SaaS Subscription Business (SaaS Inc.) – A software-as-a-service company with 50 sales representatives sells subscriptions that often have complex pricing, including tiered pricing, renewals, and add-ons. They opt to give all 50 reps a Salesforce CPQ license because every rep frequently creates quotes and proposals for customers. In their case, the quote process is central to each sale, and they want reps to be self-sufficient. However, only 10 of those licenses are the CPQ+ edition (assigned to the operations team and a few reps who handle the most complex enterprise deals). The remaining 40 are standard CPQ, which is sufficient for quoting standard deals. This mix was chosen to save cost – only the ops team needed advanced approvals and plugin integrations that required CPQ+. For Salesforce Billing, SaaS Inc. decided to implement it to manage their recurring billing inside Salesforce. They purchase Revenue Cloud (CPQ+ and Billing) licenses for 10 users in Finance/DevOps who manage billing. These 10 users happen to overlap with 5 ops users who already have CPQ+ and 5 new finance users who were given Salesforce Platform and Billing licenses. Now, invoices for subscriptions are generated in Salesforce automatically when a deal closes. Those finance users handle invoice adjustments and payment recording in Salesforce Billing. The Billing data is integrated nightly into the company’s accounting system for financial reporting. By using Salesforce Billing, SaaS Inc. can automate renewals and provide sales and support teams with visibility into customers’ billing status directly on the Salesforce Account page (e.g., checking if a customer is overdue or their annual spend, as pulled from the Billing records). Budget-wise, they negotiated a bundle for the 50 CPQ users and 10 billing users under a unified contract. They also engaged an independent expert to validate the pricing and got a 15% discount compared to list prices due to the volume and multi-year commitment. They allocate an additional budget for data storage, as storing invoice data for thousands of customers in Salesforce will require an extra storage block in year 2 or 3.
- Example 3: Regional Telecom Provider – A telecommunications firm has a salesforce of 30 but a very large number of customers and transactions. They use CPQ for configuring complex telecom packages (phone, internet, TV bundles). They bought 30 CPQ licenses so every sales agent can configure deals on the fly (because speed is important in their competitive market – waiting for a specialist would hurt agility). They chose CPQ+ for all 30 because they needed the advanced features, especially usage-based pricing, which is a CPQ+ only feature and also ties into billing. They also purchased Salesforce Billing (Billing Plus) because their business involves recurring monthly charges and usage, such as data overages, that they wanted to track in Salesforce. They licensed Billing for five finance users who oversee the billing cycles. In addition, they integrated Salesforce Billing with their existing billing mediation system (for usage data) and their Oracle Financials system. The integration is real-time for usage records: as customers use services, usage detail records flow into Salesforce Billing, which rates them based on the configured pricing rules and accumulates charges. At the end of each month, invoices are generated in Salesforce for each account. Those invoices are then sent to Oracle for record-keeping and posted to the general ledger (GL). Because of the volume of invoices (tens of thousands), the CIO had to ensure the Salesforce org was optimized. They purchased additional API capacity and a larger data storage allocation, and ran archiving jobs to move older invoice records to a data warehouse after two years. They also made heavy use of the partner community CPQ feature for their reseller network. About 50 partner salespeople log in via a partner portal and use CPQ to quote services for end customers, taking advantage of special partner pricing. They pay the partner community CPQ license fees for those 50 external users, which is far cheaper than internal licenses. The CIO, in this case, has a sizable Salesforce spend. However, it replaced a legacy CPQ system, which tied together sales and billing, leading to faster quote-to-cash cycles. The budgeting accounted for not just the licenses but also a contingency for performance tuning (they knew they might need Salesforce Signature Support, a premium support level, to help manage such a complex deployment).
These examples highlight different strategies: limiting licenses to a team versus giving everyone access, integrating with existing systems versus using Salesforce’s full capabilities, and how industries and business models influence the approach.
In each scenario, the CIO balanced license cost with process efficiency and chose an allocation that fit their needs. Your organization’s approach will depend on your specific context, but the takeaway is to align license spending with where the business gets value from CPQ/Billing.
Recommendations for CIOs
In light of the above, here is a summary of best practices and strategic advice for CIOs managing Salesforce CPQ and Billing licensing:
- Assess and Segment Your Users: Don’t automatically license everyone. Analyze which roles truly need CPQ/Billing access. Identify power users vs. occasional users. License the heavy users of the functionality and find alternative workflows for light users to avoid needless costs. This might mean, for example, giving CPQ to sales ops and a subset of sales reps rather than the entire sales force.
- Start with a Focused Deployment: Especially if new to CPQ, consider a phased rollout. Begin with a core group (or one division) to gauge usage and requirements. This helps in right-sizing license counts. You can expand to more users once the value is proven, rather than buying hundreds of licenses upfront that might go underused initially.
- Optimize License Mix: Take advantage of Salesforce’s license options. For CPQ, evaluate standard vs. CPQ+ licenses based on user needs – you may save money by providing advanced features only to those who need them. Similarly, if implementing Billing, decide between Billing Growth vs. Plus based on whether you require usage billing or revenue recognition. Mixing license types (where allowed) can tailor the cost to usage. Also, remember that external users (partners/customers) have specialized CPQ license options available through Communities, which are significantly cheaper than internal licenses – use these for partner quoting scenarios.
- Use Processes and Tools to Reduce License Needs: Implement internal processes, such as a quoting desk or centralized quoting support, to handle tasks for unlicensed users. Leverage built-in Salesforce features (standard quotes, approval via email) so that not every participant in the process needs a full CPQ license. Essentially, maximize the utility of each license purchased by having licensed users serve multiple others or automating tasks that can be done.
- Plan Integration Thoughtfully: If you have an ERP or existing billing system, carefully decide how Salesforce CPQ/Billing will integrate. Avoid duplication of functionality – if Salesforce Billing is used, determine what role the ERP will play (perhaps general ledger only). If Salesforce Billing is not used, ensure a robust integration between CPQ and your billing system so that nothing falls through the cracks. Early integration design will prevent costly rework or data silos. Involve stakeholders from both the Sales and Finance/ERP teams to align requirements.
- Budget for the Full Picture: When calculating costs, include everything – Salesforce license fees for CPQ/Billing (and additional base licenses for new users, such as finance), one-time implementation costs, integration development, and ongoing admin and support costs. Also, factor in potential needs like additional storage, sandbox environments for testing CPQ changes, or premium support if your quote-to-cash process is critical to your mission. Transparency in total cost of ownership (TCO) will help set the right expectations with the CFO and justify the investment by comparing it against the improvements in efficiency or revenue enablement.
- Leverage Renewal Cycles and Negotiation: Align CPQ and Billing licensing decisions with your Salesforce contract cycles. You have the most leverage to negotiate favorable terms when you’re up for renewal or expanding your Salesforce footprint. Negotiate multi-year caps, built-in expansions, or bundles (such as Revenue Cloud) to secure better pricing. Don’t hesitate to push for incentives – Salesforce is often willing to be flexible, especially if adopting new products like Revenue Cloud, to land success stories.
- Monitor and Reevaluate Regularly: After implementation, continuously monitor license usage. Use Salesforce reporting or the Lightning Usage App to see which users are creating quotes or accessing billing objects. Reevaluate license assignments at least annually. Business conditions change (mergers, new product lines, staff changes) – ensure your CPQ and billing licenses stay in sync. For instance, if a region stopped using CPQ because its product line was discontinued, you might reduce licenses at renewal. Staying proactive avoids paying for idle licenses.
- Ensure User Adoption and Compliance: A license is only worth its cost if users use the tool effectively. Invest in training and get buy-in from sales and finance teams on the new processes. This will drive the adoption of CPQ and Billing, maximizing ROI. At the same time, maintain governance so that only properly licensed users are accessing CPQ/Billing features – Salesforce will enforce this via permission sets. Still, your admins should also not give workarounds that violate licensing terms. Being compliant helps avoid any risk of audit issues or surprises.
- Consider Expert Guidance: Finally, consider engaging independent licensing experts to review your Salesforce agreements and usage. Firms like Redress Compliance (among others) can provide insights into optimizing license allocations, negotiating better pricing, and ensuring you don’t overpay for unused capacity. They can benchmark your deal against industry peers and advise if, for example, a different licensing model (like a Salesforce subscription based on revenue or an unlimited license agreement) might suit your case. While not every organization may need this, it can be particularly valuable for large-scale deployments with complex licensing, such as CPQ and Billing across hundreds of users or multiple Salesforce organizations. An expert review could surface opportunities to save costs or structure your contracts in a more scalable way.
By following these recommendations, CIOs can strategically manage Salesforce CPQ and Billing licensing, delivering the functionality the business needs for efficient quote-to-cash operations while controlling costs and maintaining flexibility as the company grows or changes.
The key is to align licensing decisions with business value: invest where it accelerates revenue and improves customer service, trim where there is redundancy or low usage, and always keep an eye on the evolving Salesforce product landscape for new options.
