August 21 by Patrick Wolf
Want to win big points with your CFO, auditors and stakeholders, all while eliminating unnecessary risk from your business? Adopt an elegant, integrated Revenue Management Solution ASAP.
While customer-facing teams often overlook the revenue management process, it’s a critical part doing business. And when revenue management is manual, the odds of restatement — i.e. a formal, public announcement you’ve screwed up the books — are high. (If you’re unfamiliar with the consequences of restatements, not only do they cost your company dollars, but they can lead to very real consequences—like a strint in pinstripes or stock devaluation.)
On the other hand, with a good revenue management solution, Finance can more accurately recognize revenue, save tremendous amounts of time and keep the business in compliance with revenue recognition guidelines.
But accurate data, and streamlined processes aren’t the only advantages to be gained by integrating your revenue management.
Effective Revenue Management Solution
1. Helps You Manage Cash Flow: Cash flow is the amount of cash your company has, or expects to have, on hand at any given time. And as the ever-wise Wu-Tang Clan once said, “Cash rules everything around me, dolla dolla bills y’all.”
Knowing—and accurately forecasting—what’s coming in and out is crucial, because it determines what purchases you can make, how much you can pay your employees, what programs you can adopt, and what interest rates you can borrow money at. Wouldn’t that be nice if all that information was in a centralized cloud system instead of in a variety of spreadsheets inside your accountants’ computers?
2. Ensures Your Billing Schedules Match Customer Expectations: Billing schedules are the forward-looking plan for invoicing your customers, which in turn, serves as the foundation for your cash flow. If you aren’t punctually billing customers or collecting the correct amounts for your products, services and subscriptions, your cash flow will suffer. Not to mention, if your billing schedule doesn’t align with your customers’ expectations, your customers will soon be looking for a more reliable vendor.
3. Speeds Your Revenue Cycles: The revenue cycle is the plan accounting teams us to align their revenue recognition tasks with actual product and service delivery. The faster the cycle, the faster cash is in hand and the faster you can use that revenue to grow business value.
4. Helps You Accurately Recognize Revenue: In many companies, Finance lacks the appropriate visibility into agreed-upon terms, commitments, and pricing — especially when this information is stored in spreadsheets on a desktop. The complication is worse when revenue from different types of products and services has to be recognized in specific ways, and when it is common practice to make changes to orders after the initial contract is signed. This is only to get more complicated with the addition of new regulations, especially ASC 606.
If finance doesn’t have access to deal information in real time, mistakes are bound to happen. That’s why companies that recognize revenue within a more robust Quote-to-Cash solution benefit from the ability to automatically pull business rules that govern the sales process to assess pricing and use contract data — like order delivery dates and pricing terms — to create an accurate billing and revenue forecast.
5. Makes Your CFO’s Job A Lot Easier: And a happy CFO is always a good thing. A recent survey found that a majority of financial professionals struggle with accurately projecting their company’s future finances, obtaining real-time visibility across the organization, measuring the successes and failures of current business strategies and managing financial risk.
Please download this presentation video to learn more how on Integrating Revenue Management with your Quote-to-Cash process delivers unrivaled visibility and reliability.