Why has automated revenue management become critical for today’s businesses? In the words of Andrew Dailey, Managing Director at MGI Research, “Today’s digital businesses and global organizations view automated revenue management solutions as critical for managing the volume, complexity, and velocity of today’s revenue streams from a mix of subscriptions, usage-based billing, services, digital goods, and more.”
Let’s uncover why it’s becoming table stakes for companies large and small and across virtually all industries.
Now’s the Time for Automated Revenue Management
Are you using paper ledgers or spreadsheets to crunch numbers for monthly, quarterly, and yearly projections and reports? If so, is your organization suffering from:
- Too few accountants to handle the growing and increasingly complex workload
- Errors resulting from manual efforts, inaccurate invoices sent to customers
- Revenue that is not recognized in accordance with ASC 606 and IFRS 15 regulations
- DSO (days sales outstanding) that are on an upward climb
- Customers who are becoming increasingly dissatisfied and ultimately churn
Any one of these are cause for concern, but in combination they pose a considerable threat to your cash flow and overall viability of your organization.
There’s a lot that goes into sustaining profitability over the long term. At the top of the list is having the ability to transform from being a reactive to proactive organization. However, getting to that point requires selling the right product or service to the right customer at the right price. Plus doing it in the most cost-efficient way possible – commonly referred to as revenue management.
Why Revenue Management Automation is Essential for Financial Growth
There’s a lot of moving and complex components associated with revenue management – from quote and order through billing and revenue recognition to reporting and disclosure and everything in between. This is why organizations, like yours, are investing in software solutions to automate the end-to-end quote-to-cash (Q2C) process.
The start of the process – quotation – is the cornerstone of your profitability. While the first step in Q2C, it is the third process in configure-price-quote (CPQ). If either the configuration or pricing is inaccurate, the quote presented to the customer will leave money on the table and could result in losing a sale. Additionally, this single process has downstream ramifications that affect order processing, the ability to produce an accurate invoice, and of course revenue recognition.
The final step in Q2C – revenue recognition – is complex and largely dependent on your business model, revenue recognition method, and accounting method used. When handled manually, revenue recognition is time-consuming, error-prone, and could result in non-compliance with ASC 606 and IFRS 15 revenue recognition standards.
With automated revenue management – from configuration through to revenue recognition – you can eliminate tedious and error-prone tasks, deliver the right products and services at the right price, comply with revenue recognition standards, and deliver the kind of experience that creates customer loyalty.
Realize the Benefits of Automated Revenue Management
Revenue management automation centers on two things – optimizing customer value and improving profitability. While these are significant top-line benefits, your organization will receive even more when you deploy revenue automation software.
Gain a better understanding of your competition
Whether direct or indirect competitors, the input you acquire within the revenue management process enables you to offer your products and services at an attractive price to your target market. This gives you a competitive advantage.
Keep pace with changing customer behaviors
Having your finger on the pulse of customer likes, dislikes, and requirements lets you proactively adapt. That way your products, services, and pricing models can meet the ever-changing needs of today’s dynamic market.
Emphasize product/services value
Regardless of your pricing strategy, revenue management emphasizes value rather than price. This sets you apart from the competition so you’ll appeal to a wider target market (those that are willing to pay more for quality), and develop the desirable position of being a market leader.
Develop a fully integrated financial ecosystem
By connecting critical front- and back-office systems you’re able to streamline the entire Q2C process and reduce errors and revenue leaks.
Make smarter business decisions based on accurate information
Real-time and historical insight into the health of your business is vital for you to make informed decisions on your products, services, and pricing. Some key business health indicators include total customer value (TCV), cash flow, month-to-month variances, customer churn, customer lifetime value (CLV), customer acquisition costs, and if you’re a subscription-based organization (monthly recurring revenue) and annual recurring revenue (ARR).
Adhere to revenue recognition requirements
Recognize revenue only when it is earned and stay in compliance with ASC 606 and IFRS 15.
Create a revenue management focused culture
Most organizations work in departmental silos. Implementing automated revenue management software helps to break down departmental divisions, creating an organization that uses best practices and works in unison. That way all revenue-generating decisions are made based on data.
Exceed customer expectations
Today’s customers want a frictionless experience with your organization – from the purchasing phase through receiving and paying invoices. With an automated revenue management solution, you’ll gain a better understanding of your target market’s expectations and have the insights needed to deliver the products, services, and pricing they desire.
Do all automated revenue management solutions deliver the same benefits? The short answer to this question is no. Revenue management shouldn’t be taken lightly and it’s important that you choose a software solution that best meets the needs of your organization.
Choosing the Best Automated Revenue Management Software Solution
Is the process of recognizing revenue causing frustration and exposing your organization to financial risk? Has your cash flow seen a decrease due to late payments resulting from invoicing errors? Is customer churn on the rise? If so, BillingPlatform can help!
With us, you get a sophisticated solution that manages the entire Q2C process. If you need automated, accurate, and auditable revenue management for any combination of subscription, usage, or one time offers – look no further. Only BillingPlatform provides the level of configurability and automation needed to accelerate the financial close process, adhere to strict compliance requirements, and deliver the experiences customers expect.
Positioned as a market leader in the automated revenue management market, MGI Research recognized BillingPlatform. We’re a company that has made a meaningful impression with our modern, extensible, and configurable platform that targets highly complex contractual relationships and accounting scenarios as part of a broader monetization platform. Receiving accolades from analysts and customers alike, BillingPlatform is committed to continual innovation to enable our customers to outpace the competition, monetize any revenue opportunity, and deliver a frictionless customer experience. Does that sound like something your organization could benefit from? Take a free 14-day test drive of our solution to learn more today.