Rev Up Your Revenue Recognition: Six Ways NetSuite ARM Can Help

Report your revenue confidently and accurately with NetSuite Advanced Revenue Management (ARM), designed for revenue recognition automation and compliance management.

Earning revenue is the most exciting part of your business, but how do you recognize your revenue? Did you straightway think of ASC 606 and IFRS 15? Under the influence of these standards, you are obliged to adopt a more rigorous and consistent approach to revenue recognition. Your financial statements and operations are now under increased scrutiny, and non-compliance can lead to financial penalties and laws suites. In public notice, many enterprises have demonstrated the consequences of inadequate revenue recognition practices.

Let's not discuss the ASC 606 and IFRS 15 non-compliance as an issue; rather, focus on what it aims to reform, i.e, your company's revenue process. You reckon that being accurate with your revenue recognition will benefit your financial reporting, decision-making, investor confidence, and cash flow management, as well as your compliance with accounting rules.

Automation of revenue recognition can take care of everything that is important for your financial reporting and compliance. To get started, all you need is accounting software with advanced revenue management capabilities, like NetSuite Advanced Revenue Management (ARM)

What is NetSuite Advanced Revenue Management

NetSuite ARM is a module within the NetSuite ERP software that helps businesses manage and automate their revenue recognition processes. It provides a unified platform to manage revenue recognition across multiple revenue streams, products, and services.

It automates based on predefined revenue recognition schedules, revenue allocation rules, and contract terms, and reduces the risk of errors and non-compliance while streamlining revenue recognition processes.

Six ways NetSuite ARM is Transforming Revenue Recognition

1. Flexible Revenue Recognition Rules

   NetSuite ARM offers flexible revenue recognition rules that can be configured to meet the specific requirements of your business. This includes support for multiple recognition methods, such as time-based, milestone-based, and usage-based, and the ability to set up complex revenue recognition schedules.

2. Automated Revenue Recognition

   The system enables you to set up revenue recognition rules based on your business needs. These rules can be applied automatically to sales transactions, ensuring accurate recognition of revenue in accordance with accounting standards.

3. Revenue Forecasting

   The feature provides powerful revenue forecasting capabilities that allow you to predict future revenue based on existing contracts and performance. This enables you to make informed decisions about resource allocation, budgeting, and business strategy.

4. Contract Management

   NetSuite Advanced Revenue Management includes robust contract management features that enable you to manage the entire contract lifecycle, from creation to renewal. This includes support for complex contracts with multiple deliverables, automatic revenue recognition based on contract terms, and the ability to track contract performance.

5. Real-time Revenue Reporting

   It provides real-time visibility into your revenue streams, allowing you to monitor revenue performance and make informed decisions. This includes support for detailed revenue reporting by product, region, and customer, as well as the ability to drill down into transaction-level data. Also, customizable dashboards and reports can be tailored to meet specific business needs.

6. Compliance Management

   NetSuite ARM helps you comply with revenue recognition standards such as ASC 606 and IFRS 15, reducing the risk of non-compliance penalties and legal liabilities. This includes support for multiple accounting standards, automated compliance checks, and the ability to generate compliant financial statements.

Benefits of NetSuite Advanced Revenue Management (ARM)

Using NetSuite ARM provides many benefits, including:

• Flexible revenue recognition rules specific to business needs improve accuracy in financial reporting.
• Automation, pre-set revenue rules, and schedules streamline revenue recognition processes.
• Automated revenue recognition based on standards and contract terms reduces the risk of non-compliance.
• Financial reporting accuracy and transparency improve real-time visibility into revenue performance.
• Automation reduces revenue recognition management time.
• Scalable recognition for handling high volumes of sales transactions.

NetSuite ARM Configuration for Specific Business Needs

Configuring NetSuite ARM to meet the unique needs of a specific business is a straightforward process that can be accomplished using the module's configurable revenue recognition schedules, revenue allocation rules, and contract terms. As a certified NetSuite Alliance Partner, Jade can help businesses configure NetSuite ARM to meet their specific needs.

Jade can help businesses implement and optimize NetSuite ARM for the following use cases:

NetSuite ARM for Contract Management

With NetSuite ARM, Jade helps businesses to manage revenue recognition for contracts, including defining revenue recognition schedules, handling contract modifications, and managing billing and revenue allocation.

This particular service is useful for businesses with complex contracts or recurring revenue streams, such as those in the software or media industries. Jade can help businesses implement and optimize NetSuite ARM for contract management.

NetSuite ARM and Subscription Revenue

This service is ideal for revenue recognition management for subscription-based businesses, including recognizing revenue over time, handling cancellations and refunds, and managing renewal contracts.

Jade recommends this as an ideal solution for businesses that offer software as a service (SaaS), media subscriptions, or other subscription-based products or services.

NetSuite ARM and Professional Services Revenue

It is highly preferred for managing revenue recognition for professional services businesses, including handling time and materials contracts, project-based revenue recognition, and revenue allocation across multiple services.

Jade recommends this as an ideal solution for consulting, marketing, or engineering businesses.

Endnote

In conclusion, as per Fortune Business Insights, the global accounting software market is projected to grow at a CAGR of 8.02% from 2018 to 2026, reaching $20.4 billion. This trend indicates that businesses are rapidly transitioning from manual and inefficient methods of revenue recognition to accounting software. Among various accounting software available, NetSuite ARM stands out for its advanced revenue recognition automation capabilities. It features separate modules for each revenue stream, enabling the recognition of different revenues from various sources and verticals. Its design is flexible, making it compatible with current ASC 606 and future revenue standards.

Jade is an Alliance Partner of NetSuite and a spotlight winner with over 20 years of industry experience. Jade offers NetSuite services to businesses looking to automate their revenue recognition processes and streamline their accounting operations.

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