The revenue recognition standard deadline has passed and companies that have an established solution in place are now finding themselves in an enviable position when it comes to revenue data.
Those that went through the short-term pain of implementing a solution to consolidate data from multiple siloed sources and automate reporting efforts, are coming out the other end with a rich pool of revenue data. Having this highly valuable data in one place is enabling them to take a more holistic look at revenue management, which is bringing with it a lot of exciting benefits.
Having this revenue data is presenting powerful opportunities for our revenue management clients. These finance teams are moving away from being wholly focused on compliance, to being able to contribute to the business in a valuable way. To help illustrate the shift from compliance to contribution in the revenue management space, we’ve rounded up some post-compliance benefits our clients are exploring.
Detailed analytics and powerful new performance KPIs
Aptitude RevStream client, Climate Corp observes that with an automated revenue management solution, “we have definitely been freed up to work on all of the things we have been neglecting! In particular, we can now focus on actual value-add activities, the forward-looking activities. We have a goal to provide the business with better analysis and metrics on key performance indicators, these are the things that our finance leadership truly want and that our business can make good use of."
There is no shortage of ways a good data foundation can be applied to support better business decisions. One of our largest clients is currently using their revenue management solution - a combination of the Aptitude Accounting Hub and Aptitude Revenue Recognition Engine - to generate profitability per customer. Given that they have roughly 80 Million customers, this provides a powerful source of insights. At our recent RevStream Client Advisory Board, our clients discussed other potential areas of analysis such as:
- Product, customer and/or contract churn analysis
- Volume per products
- Customer change patterns
- Modeling the results of potential FX fluctuations
Delivering valuable reports to drive business success
The benefits of a more robust revenue data foundation should not be confined to the finance teams. Teams external to accounting and finance know the data that is being collected and are ready to see valuable numbers, reports, graphs and analytics. In a recent webcast, Bryan Dean, Sr. Accounting Manager at T-Mobile commented that he is looking forward to using their Aptitude revenue management solution to “sift through that data and summarize it in a way that people can easily understand it.”
While revenue data and reporting sit clearly in the finance domain, it is information that can be used to help decision makers across the organization. From helping marketers create more profitable offers to helping account managers understand typical customer life cycle patterns – revenue data is meant to be shared.
"2018 was a lot of work in terms of making sure that we’re fully in compliance, doing the disclosures... 2019 is a chance to look at other ways the solution can be used."
-Bryan Dean, Sr. Accounting Manager, T-Mobile
Streamlining with automation and enabling the use of smart technology
For many organizations, the revenue recognition standard pushed the finance department from a manual, spreadsheet driven approach to a more automated solution. But for many companies, that is not the endgame. Bryan Dean, T-Mobile, comments:
"2018 was a lot of work in terms of making sure that we’re fully in compliance, doing the disclosures... 2019 is a chance to look at other ways the solution can be used...We’re going down the list in terms of what might be feasible to add into the solution and continue to automate and continue to get to the point of no touch as data goes through the system and then into a ledger.”
This idea of expanding the reach of automation was a core discussion topic in our recent RevStream Client Advisory Board meeting in May. One of the attending clients brought up expanding their use of bots which extract reports from RevStream and run reconciliations and data checks. Having a granular, trusted data foundation will make it easier to layer on AI and other analytics tools.
Evolving culture to support recruitment and retention of top talent
Just as user experience matters to your customers, the experience your employees have with the tools they use every day can make or break their experience. Automated revenue management means finance teams can leave behind all the rote tasks of data download, copy and paste and gain the time and tools required to deliver detailed risk analyses, precise forecasting, and data-backed business guidance.
Like any change, a new set of tools will require a new set of skills to succeed in the finance department. Finance teams of the future will need to look beyond technical accounting knowledge and hone skills like data analytics, an understanding of technology, an awareness of how transactions flow through systems and the ability to work cross-functionally as business partners.
In a previous post, we asked representatives from clients Red Hat, Activision and Sprint about how they have approached preparing their teams for technical transformation. You can read more about that here.
Despite the 2018 effective date for revenue recognition, there are companies that are still evaluating or implementing solutions to address the regulation. This may be due to a failed first solution implementation or the realization that a manual approach to compliance wasn’t going to work. If this is you – you are not alone. In fact, we just sold our largest Aptitude RevStream project to date last month!
Just as finance teams are evolving the way they approach revenue management; we are consistently evolving our revenue management solutions – Aptitude RevStream and the Aptitude Revenue Recognition Engine - to serve the needs of 35+ clients across the world. Stay tuned for new features and modules that will continue to help our clients move from compliance to contribution.