Automated Revenue Management – What, Why, and How?

Working manually on large volumes of data to make accurate revenue forecasts?

Crunching numbers from numerous spreadsheets for monthly, quarterly, and yearly projections?

Not anymore!

Simplify your revenue recognition with an Automated Revenue Management system.

Transform your revenue cycle management from being reactive to proactive.

Use automated revenue management solutions to realize every stage of the Quote-to-Cash (QTC) cycle – right from quote-order-billing-revenue recognition-reporting-to-disclosure.

An automated revenue management solution helps you comply with the latest IFRS 15 and ASC 606 revenue recognition standards, automate calculations, minimize period-end close, and get a holistic view of your recognized and deferred revenue.  

Report your financial statement accurately through our products and solutions.

Before that, let us understand revenue management and the need for automation to transform your organization’s financial growth.

What Is Revenue Management?

The simple definition of revenue management is selling the right product to the right customer for the best price and earning profit.

Businesses use revenue management strategies to predict consumer behavior and understand markets to boost their product availability and maximize revenue growth. Therefore, companies invest in QTC to make accurate revenue predictions. QTC is an IT term that refers to the integration and systematized execution of end-to-end business processes.  

Accurate revenue predictions help companies make correct strategic 

decisions and increase profits. However, most of the QTC implementations estimate income based on the order bookings and projects in the pipeline. These estimations are not precise because the figures may change before the pipeline projects are booked. Also, the bookings may not give the correct revenue allocation and variable considerations. Therefore, it becomes essential to consider revenue management system software for accurate predictions.

What Is Automated Revenue Management?

In plain words, Automated Revenue Management System is a software solution that helps companies accurately forecast revenue, estimate returns, and preview the deferred and recognized income.

An automated revenue system also helps you comply with the newest IFRS 15 and ASC 606 standards and reports accurate financial statements before the closing date.

Why Automated Revenue Management Is Required?

Use an automated revenue management system to automate the entire revenue generation starting from the quote to cash. Implement the software solution into your monetization cycle to enhance the revenue generation capabilities.

Automation brings your sales and finance teams together to optimize customer value and profits.

Automated revenue management solutions like Ayara help organizations:

  • Automate the key processes.
  • Provide real-time insight into the functional and financial performance.
  • Provide cognitive assessment of the contract terms and suggest modifications.
  • Provide gross margin evaluation.
  • Offer revenue allocation on the quote.
  • Integrate with major CPQ solutions.
  • Analyze Standalone Selling Price (SSP)
  • Support complex business processes.
  • Adhere to reporting and compliance.
  • Get bundle attribution and variable consideration.
  • Enable quick and effective decision-making.
  • Increase your return on investment.

Free your in-house staff from the tedious job of sourcing, gathering, and calculating numbers from numerous spreadsheets. Allow them to work on productive tasks.

How Automated Revenue Management Works?

Accessing correct data in the initial stages of QTC gives accurate revenue forecasts and helps enterprises fix low-margin bookings without approvals. Teams can calculate profit margins based on the revenue estimations during pricing and take necessary approvals before confirming the quote.

So, how does automated revenue management work?

Automated Revenue Solution works on three components –

  • Format needed to determine the returns.
  • Predefined rules to allocate the returns.
  • Make an estimation.

The automated solution presents the allocated and forecasted figures during the quote to the user. The user can finalize the figures after confirming them. Also, every time a user changes any of the pricing attributes, the allocations and estimations change. This ensures that the latest changes in the quote are reflected throughout the QTC cycle.

Revenue solution starts during a quote creation in the Configure, Price, Quote (CPQ) system and estimates the transaction price. The transaction price is determined by deducting the variables from the net cost.

Once the transaction price is determined, it is used to allocate the revenue based on the predefined formulas and rules. The CPQ system then calculates the earnings from the deal. The earning is determined by deducting the cost from the revenue allocation.

If the profit margin is lower than the approved threshold, the software can trigger a plan for approval. The revenue solution can help companies understand how the revenue estimated during the deal is spread over a period. Revenue estimation helps enterprises use the data to further analyze their financial growth.  

Conclusion

Automated revenue management solutions give accurate estimations in the first stages of the QTC process and aid in deciding the margins you want from each deal. Make smart strategic decisions with reliable data and give direction to your financial growth right from the beginning.

Ayara, an intelligent solution for your revenue growth, automates every aspect of the QTC cycle and smoothly integrates with any CPQ system, such as Salesforce, Congo+Apttus, and others. Gain quick visibility on margins while pricing with Ayara, and be assured you have the latest data.

Comply with the latest Generally Accepted Accounting Principle standards, understand the criteria for revenue recognition, and file your financial statements before the end with our revenue intelligence solution.

For correct revenue recognition, Ayara is the best solution! Contact us now.

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