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4 Ways NetSuite for Revenue Recognition Empowers You To Report Revenues Confidently
Revenues are the soul of any business. Without revenues, no business can exist, because if there is no revenues, then it means that there is no business.
Everything which a business does is directly or indirectly related to revenue and sales, and if this aspect of the business is not measured, calibrated, and optimized, then the entire objective of doing that business fails.
In this endeavor, revenue recognition is a very critical activity that forms the foundation of marketing, sales, production and workflow of an organization.
Investopedia defines revenue recognition as “a generally accepted accounting principle (GAAP) that identifies the specific conditions in which revenue is recognized and determines how to account for it.” (Source)
Normally, revenue is recognized once a critical event has already occurred, and when the dollar amount is easily measurable to the company.
However, there exist challenges in revenue recognition: Due to changing accounting practices and protocols, different taxation systems across different nations, market fluctuations and more factors, there is always an element of doubt.
NetSuite, which is a leading Cloud based ERP provider, has understood these challenges, and have devised a robust platform that empowers business owners and corporates to recognize revenue with confidence.
Here are 4 ways this is made possible:
Automated Planning
Based on the pre-defined rules, accounting and financial management teams can now automate the scheduling of revenues recognition, in a specific period of time. The rules for revenue recognition can be triggered based on specific sales, as well as plan duration. The rules also can be reused, based on its effectiveness and implication.
This entire automation of the process leaves little doubt and apprehensions, and there is a greater deal of flexibility associated with it.
Multi-Currency Support
One of the biggest reasons for deviations and inaccuracy in revenue recognition is the factor of multiple currencies being used by a single organization. This can be due to diverse geographical locations of the business or inflow of foreign funds extensively. NetSuite handles this fluctuation by supporting multiple currencies, and their accurate exchange rates, in real time.
This removes ambiguity and unstable revenue recognition methodologies and streamlines the entire process.
The Power Of Real-Time Data
With NetSuite, organizations can be assured of real-time data related to the financials, and this makes a world of difference when it comes to revenue recognition. Accounts team can now automatically post Revenue Plans to the general ledger, based on the schedule, in real-time, as frequently as they wish.
This is a game-changing aspect of Revenue Recognition.
Next Level Forecasting
As stated earlier, real-time access of financial data changes everything. And this implies to forecasting revenues as well, which is a critical aspect of revenue recognition. Using real-time data of sales, payments and expenses, the accounts team can accommodate the fast-changing finances of the company into the overall revenue recognition model.
This takes forecasting to the next level of accuracy, seldom seen or experienced in ERP solutions.
