Revenue Automation 
Software Buyer’s Guide

Your complete roadmap for researching, testing, and selecting the right revenue automation software for your company
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Are you automating enough?

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, most companies who adopt an end-to-end revenue automation solution can see a positive return on investment (ROI) in just two quarters.

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

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What is revenue automation software?

While specific capabilities can vary, these solutions generally provide automation of revenue recognition and allocations, management of different types of revenue streams, analytics, reporting, and forecasting.

Modern revenue automation solutions are specifically designed with the needs of today’s revenue accountants in mind. These specialized solutions function as a revenue subledger by capturing transaction and revenue event data from an existing billing system, CRM, ERP, or payment gateway and then automating the revenue recognition process. The resulting journal entries can then be fed seamlessly back into the general ledger. 

This increased revenue automation can help minimize manual processes, reduce risk, and prevent revenue leakage. And, with increased automation, revenue teams are able to devote more time to analytics and business partnering. 

What key features and capabilities should you look for?

Look for an end-to-end revenue automation solution that includes:

Contract grouping
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Performance obligations
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Contract modifications
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Standalone selling price (SSP)
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Delivery-based rev rec
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Close process dashboard
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Revenue reporting
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Cost management
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Variable consideration (VC)
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How do you know if you need more revenue automation? 

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

Preparing for M&A or IPO
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Reducing manual processes
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Minimizing customizations and hidden costs
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Improving SSP analysis
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Streamlining reporting and close process
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Reducing audit time and costs
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Improving job satisfaction and retaining employees
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“When you’re planning this out, make sure you budget your time and realize what your constraints are on your accounting resources because they’re the ones who are going to have to test this and they’re the ones who are going to have to approve any designs. Even if you use an implementer, or IT helps you with it, or you have business analysts, ultimately it’s those same revenue accountants who do the process today that need to be involved in making sure it’s going to work.”
– Bryan Anderson
Senior Manager/EY

How do you choose the right revenue automation solution for your business?

The following is a roadmap for evaluating and selecting the right solution for your business: 

Understand the needs of your team
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Understand the needs of the business
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Document current and future use cases
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Define your technical requirements
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Secure executive buy-in
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How do you test and evaluate vendor offerings?

Once you’ve clarified the scope of the project, documented use cases, and discovered solutions that may meet your requirements, it’s time to test and evaluate those vendor offerings. 

Make your vendors explain how they will handle your use cases and demo the key use cases. If possible, use real contract data to prototype and test each solution—this makes it easier to compare and contrast results. 

Determine how you will reconcile and validate the system for completeness and accuracy. This includes making sure you capture all of the upstream data, everything processed in the subledger, and the results passed through to the general ledger. 

Ask vendors how many of their customers achieve full automation and ask for customer references, particularly businesses with similar requirements. For best results, use the same demo script for every vendor, this way, you can test and evaluate each solution against the same list of capabilities and use cases. 

What are some key questions to ask?

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“As you move into testing, use real data. That’s one of the most important things. You already have the results—you can run old contracts back through; existing contracts. As you have your system built, make sure your results are coming out as you expect. You can do this in large volumes too to flush out and make sure you actually have a complete set of all your use cases.”
– Bryan Anderson
Senior Manager/EY
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Making the decision and planning for implementation

After you’ve evaluated findings from testing, research, and references, it’s time to make a decision:
  • Summarize and compare evaluation results for all the vendors

  • If necessary, remind everyone of the goals of the project and review requirements

  • Exclude solutions that don’t meet high-level requirements

  • Make a recommendation and be sure the document why the solution

  • Present recommendations to executives

  • Plan for the time and resource commitment required to get the job done right, the first time.

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10 things you should know about your ERP revenue module

When evaluating options for automating revenue recognition, your ERP rev rec module is a logical first step. Before you decide, you need to validate whether the ERP module is the right solution for your current and future requirements. Here are 10 questions to ask your ERP vendor.

State of Revenue Accounting Report

We surveyed over 500 accounting and finance leaders to analyze the current state of revenue accounting. This report reveals challenges and opportunities that teams are facing.

Case study: Hudl

We surveyed over 500 accounting and finance leaders to analyze the current state of revenue accounting. This report reveals challenges and opportunities that teams are facing.