How revenue automation can support your business initiatives

How revenue automation can support your business initiatives

How do you know if you need more revenue automation? As your business grows and scales to meet changing customer needs, shifting industry trends, and compliance requirements, you will inevitably find your revenue recognition processes becoming more complex.

To keep up with the rapid pace of change, your accounting team will need greater levels of automation and more agile technology that is purpose built for modern revenue recognition.

According to MGI analysis of the industry, most companies who adopt an end-to-end revenue automation solution can see a positive return on investment (ROI) in just two quarters (6 months)? 

Access the complete roadmap for researching, testing, and selecting the right revenue automation software for your company. Read the guide

The following are business initiatives that may drive the need for revenue automation software:

  • Preparing for M&A or IPO
  • Reducing manual processes
  • Minimizing customizations and hidden costs
  • Improving SSP analysis
  • Streamlining reporting and close process
  • Reducing audit time and costs
  • Improving job satisfaction and retaining employees

Preparing for Mergers and Acquisitions (M&A) or Initial Public Offering (IPO)

If your company is preparing for M&A or an IPO, an audit of your Accounting Operations will likely be performed. This often reveals areas of potential improvement, such as the need for additional automation, controls, and process enhancements. 

New processes or controls may be required to validate completeness and accuracy from the source systems through revenue accounting and to the general ledger.

Related: Struggling to meet revenue accounting needs with your ERP?

Reducing manual processes

Research shows that revenue teams may spend over half their time performing repetitive manual tasks. And 79% of revenue accounting team members report that they rely on multiple spreadsheets in addition to their ERP as part of their rev rec process. 

Adding end-to-end revenue automation software can help save time and redirect resources to value-added tasks, reduce errors and risk, and increase employee satisfaction and retention.

Related: 9 benefits of end-to-end revenue automation

 

“I see this pattern quite often in the industry – a ton of automation in the CRM space but hardly any in the back office specifically in Revenue Management. Accountants are spending significant time on manual, repetitive tasks. This is not only inefficient, but it also opens up the door to errors, especially if the company is still doing revenue calculations on Excel. Revenue automation can help to streamline processes, improve accuracy, and free up revenue teams to focus on more strategic work.”

– Subbu Ramanathan, Senior Manager, Deloitte & Touche LLP

Minimizing customizations and hidden costs

You may assume that your current workarounds, spreadsheets, or your ERP’s revenue module will be cheaper than an end-to-end solution, but the costs can add up. As your go-to-market (GTM) approach evolves and your customizations multiply, the extra work to create and maintain customizations for these limited solutions can incur additional, ongoing costs. 

In fact, 65% of revenue accounting team members say customizations and ongoing maintenance led to a higher than anticipated total cost of ownership for their ERP revenue modules. 

Adding end-to-end revenue automation software can significantly reduce the need for customization and manual tasks, thereby also potentially reducing costs.

Improving SSP analysis

How is your revenue accounting team handling SSP analysis today—is it a manually driven process? One out of five revenue accounting team members say that their inability to do automated, real-time SSP analysis is one of their biggest data challenges. 

Look for revenue automation software that features a built-in SSP analyzer, which automatically reviews by line item or SKU and analyzes historical data to fully determine SSP values. 

Additionally, accountants can apply rules to allocate these SSP values across all the performance obligations (POBs) in a revenue contract in an automated fashion, in accordance with their revenue policy, and all while maintaining compliance with ASC 606 and IFRS 15. 

Related: 10 things you should know about your ERP revenue module

Streamlining the reporting and close process

Is your accounting team creating custom reports, queries, or code to gather required data? You may also require a third party or IT engagement to pull the data from multiple sources. 

This additional work can lead to a delayed close, meaning there’s less time for a CFO and the rest of the C-suite and Board of Directors to finalize all the financial summaries, forecasts, and overall story for earnings calls and speaking with investors.

Adding a solution with real-time analytics and a close process dashboard can allow you to achieve a high-level understanding of financial data for the current open period, identify data problems, mitigate revenue errors, or make adjustments throughout the month that allow for real-time, continuous GAAP revenue reporting. 

Look for a solution that provides revenue reports out-of-the-box, including revenue and deferred revenue waterfalls, disclosure reports, and audit trails.

Related podcast: Reducing close time to 3 days

“The dreaded month end close which every Office of the Close team loves to hate; As someone who has seen firsthand the rigors of closing the books with manual and lengthy close cycle processes, I urge businesses to take a close look at their revenue accounting processes and consider how automation can help to improve them. By doing so, businesses can not only improve the efficiency and accuracy of their revenue reporting, but they can also help to reduce costs, improve compliance, and help to create a more fulfilling and rewarding work environment for their revenue team.”

– Subbu Ramanathan, Senior Manager, Deloitte & Touche LLP

Reducing audit time and costs

Instead of automated systems, you may be stuck with headaches like manual processes and data that must be exported into spreadsheets in order to gain the appropriate insights. 

Not only does this waste valuable time for the accounting team, as they have to handle more manual tasks associated with a company’s revenue recognition, but there is also more effort required by an auditor to validate the accuracy and completeness of that process. 

This can increase your company’s overall risk profile, an auditor’s workload, and time spent by internal employees supporting the audit. A whopping 65% of revenue accounting team members report concerns about the risk of misstatement because of existing manual processes and control risks.

To help mitigate risk and reduce overall company costs as the business grows, it’s imperative to maximize the amount of automation within revenue accounting processes. 

Improving job satisfaction and retaining employees

It’s clear that the lack of automation in the revenue process is causing employees to be overwhelmed and stressed at work. A staggering 63% of revenue accounting team members report poor revenue processes affect their mental health. And 65% report working past midnight at least once in the last year. 

In addition to the stress, manual processes, repetitive work, and lengthy close processes all reduce revenue teams’ abilities to focus on strategy, analytics, and business partnering, often resulting in frustration, exhaustion, and a lack of purpose. 

If you or your team are facing any of these pain points, it may be time to consider solutions that deliver additional automation capabilities. 

Implement revenue automation with the right technology

The revenue automation software buyer’s guide provides a complete roadmap for researching, evaluating, and selecting the right revenue automation software for your company.

 

Recommended for you

Beyond KPIs: Benchmarks that Empower Modern Businesses
Streamline Data Integration with Zuora for Better Insights
Proactive support: The secret weapon to beat customer churn