If we had to describe last year in a single word, it might be permacrisis (an extended period of instability and insecurity). There was the continuing pandemic fallout, the UK’s decision to leave the European Union and its ongoing ramifications, and mounting economic pressures. Organizations and consumers alike are feeling the pressure to reassess thier spending priorities and revenue management strategies.
That being said, it should come as no surprise that 2023 is starting as another challenging year. In fact, top-tier financial services companies such as Bloomberg, JPMorgan Chase, and others are predicting a continuation of the economic headwind that has not only gripped the nation but the world. Look at the following quotes that are representative of what’s making headlines.
“The worst is yet to come, and for many people 2023 will feel like a recession.” “We expect the U.S. economy to expand at a muted 0.5 – 1% pace in 2023.” “…a marked slowdown in global economic growth in 2023.”
However, these challenges bring opportunities for companies to rise above current circumstances to not only survive but thrive.
How Companies are Weathering the Economic Storm
One would think that given the continuing economic upheaval; organizations would be pessimistic about the future. Not exactly. Our recent revenue management strategies survey uncovered some interesting results. For instance, over 50% of companies are feeling cautiously optimistic about the coming year. When asked if they are planning on increasing or decreasing spend in 2023; 68% are planning to tighten their purse strings, while 25% are anticipating an increase in spending. While these results align with what financial experts and analysts are predicting, many enterprises are using the economic turmoil to evolve their businesses and capture new sources of revenue.
While many companies are planning to decrease spending, they are also looking to build out and scale their businesses by making smart purchasing decisions. For example, finance teams most likely won’t see an increase in headcount. In response to what is becoming long-term market unpredictability and reduced spending, there are two approaches companies will take this year.
- Stay the current course using manual processes for revenue management.
- Adopt revenue automation software as a cost savings investment.
When thinking about decreasing spend, especially in terms of revenue recognition trends, finance leaders need to evaluate every aspect of their processes. Then they can identify every source of potential revenue.
Revenue Management Strategies: Drive Growth with Revenue Recognition Automation Software
During times of financial instability, it’s natural for companies to delay investing in new software. While this may be true for many software automation solutions, it’s not the case for revenue management software. In fact, in 2023, revenue management strategies we’re seeing show automation rising to the top of finance leaders’ investment list. By onboarding revenue automation software, organizations can maintain internal controls, handle internal and external financial reporting responsibilities, and operationalize new business models. All of this enables them to drive growth despite having limited resources.
Gartner describes an organization’s ability to overcome today’s uncertainty nicely. Shifting focus from pandemic and inflation to building a more resilient workforce and managing costs, while continuing to innovate and grow. Although innovation plays a key role in sustainability and growth over the long term, some companies will opt for business as usual. For companies not planning to innovate, they’ll continue to rely on their current systems and processes. This may or may not be enough to weather the ongoing effects of the economic storm.
Future-focused companies will get creative with their products and services, how they sell them, and how they go to market. These new business models require enterprises to have the resources, as well as the capabilities to automate their innovations to scale. In preparation of developing and launching new business models, companies will need to invest in revenue automation software to unify and automate manual operational processes.
Given their inherently flexible nature, revenue automation platforms enable enterprises to quickly and easily automate the revenue process for an array of new business models. They also generate reports to provide the insights needed to make strategic business decisions. For organizations that invest in revenue automation, all this and more will be accomplished with much less manual effort.
Revenue Management Strategies: Automating Revenue Management Continues its Upwards Trend
Let’s look at the current state of revenue recognition and accounting operations as a whole. Many companies use a hybrid approach with some processes automated and others manual. This was sufficient prior to ASC 606 and IFRS 15 standards, however regulatory compliance became a driving force for automation tools and systems. Today, over 62% of companies use a non-excel automation tool, and the need growing while companies want the automation platform to do more.
Companies that adopted a revenue automation platform 5+ years ago now want to expand system’s use to perform more revenue and accounting functions. Driving the desire for increased usage are a number of factors. These include resource constraints and over the years companies have had the opportunity to grow into their systems. They’ve gained trust and a comfort level not previously there at implementation.
Today, enterprises want to transition more (or all) of their processes onto a revenue automation platform. This includes revenue accounting, billing, invoicing, and subscription management capabilities. All of which provides enterprises with a single source of truth, unlocking additional automation opportunities.
Achieving a single source of truth doesn’t stop at consolidating functions on a single platform. You also should integrate with general ledgers and ERP systems. The growing trend is for organizations to pull as many functions as possible from spreadsheets and ERP systems and put them into revenue automation systems.
Gaining a single source of truth is probably the most recognizable benefit, there are also financial advantages. After purchasing a revenue automation platform, you’re paying licensing and subscription fees for the platform. So, it makes sense to get as much from the platform as possible. Additionally, once the operational processes are in the platform, it instantly increases supporting insights. Giving you the ability to scale without increasing software costs.
Do More with Next-Generation Revenue Automation Software
Revenue automation software providers have been on the forefront of technology enhancements to bring capabilities to market that previously didn’t exist. They’re unlocking opportunities to streamline revenue automation for new business models. As technology continues to evolve and improve, revenue automation software providers are increasing their efforts to improve their products and services to quickly bring new capabilities to market.
Although revenue recognition and automation systems are still relatively young, they’re quickly advancing to meet the growing needs of today’s organizations and market conditions. For most revenue automation software providers, each release cycle includes new features that tackle an increasing number of the revenue process. Many revenue automation software providers have reached a critical mass of features in their systems. However, companies like BillingPlatform are increasing the pace to deliver the innovative features and functionality needed to automate even more revenue functions.
Profitability and Growth Starts with Revenue Automation
The macro-economic outlook in 2023 may look challenging, but now’s the time to make smart investment decisions. Pivoting your revenue management strategies for the year may be critical to ensure success. Organizations will need to get creative with new business models to meet growth projections. However, that’s irrelevant if revenue operations can’t keep up with the new innovative business models. This is why companies will look to automation to address their needs. Whether that’s adopting a revenue automation system or expanding the usage and functionality of one previously purchased.
BillingPlatform provides a cloud-based solution that enables you to easily automate any business model. All the way from simple subscriptions through to complex high-volume, usage-based models. Extremely flexible, organizations can bring new products and services to market 30% faster and reduce operational costs by as much as 50%. This agility puts enterprises in control of how they differentiate themselves in today’s increasingly crowded marketplace. They can easily maximize profitability, reduce costs, and optimize the customer experience. With BillingPlatform, you get a complete package that puts total financial control into the hands of the enterprise, enabling you to run your business more efficiently and cost effectively.
Are you ready to rise above the economic challenges of 2023? Let us help implement your revenue management strategies efficiently and smoothly, learn more today.
