Complying with the New Revenue Recognition Standards with Order-to-Cash Automation

As we know, Covid-19 led disruptions have forced business and technology leaders to re-think business stability, sustainability and continuity strategies. As business landscapes and ecosystems face turmoil, managing customer relationships, supply chains and B2B payments means that organizations have to navigate complex order-to-cash (O2C) practices. Thus, automating processes across order, procurement and invoicing, and embracing revenue management transformation can help overcome the challenges of managing multi-currency, usage based and high-volume transactions.

Enterprises are fast realizing how O2C impacts the bottom line and relationships with the customers. Without an optimized and automated O2C process, there is greater risk of compromising customer relationships, revenue potential and ROI.

According to recent research by PYMNTS, 43.8 percent of invoices are still delivered via fax machine and 72.4 percent arrive via postal mail. These inefficiencies create ripple effects for enterprises and customers.

While technology reports have proven the benefits of modernizing the order-to-cash process, especially in these unprecedented times, here are a few important questions that will help you evaluate if your organization’s monetization system needs a transformation:

1. Is your company going through a period of rapid growth in recurring revenue?
2. Do you need to scale financial operations quickly and efficiently?
3. Is the current financial process not supporting complex transactions compounded by amendments in customer orders?
4. Are transactions spread across multiple countries?
5. Are your orders originating from a diverse customer base, impacted by seasonal fluctuations?
6. Are increasing regulatory pressures (ASC 606 and IFRS 15), demanding improved revenue recognition, compliance and reporting?
7. Is there a need to accelerate payment reconciliation and transform account receivables?
8. Is there a delay in receiving payments due to missing details, incorrect information and reliance on spreadsheets or manual entries?

Automating at least some of those processes can mitigate these pain points across the O2C gamut. Not optimizing or automating the financial processes will only generate a negative downstream impact on both collections and customer retention.

Another downside of not modernizing the O2C process is that your external and internal partners will not be on the same page. Manufacturers may be focused on market share, while distributors are focused on improving their cost framework. With a distributor between the manufacturer and the customer, the manufacturer won’t have integrated data on the customer leading to lack of knowledge and familiarity of their buying habits and preferences that can help to render personalization - a crucial step towards customer retention. Moreover, digitizing the information flow empowers manufacturers with consumer data, that can help them forecast purchase patterns. The distributors too can optimize their invoicing processes, thus creating a win-win situation for the entire ecosystem to grow and expand their footprint.

Companies that have M&A activity can gain significantly from embracing digital transformation in finance function, particularly when it comes to eliminating siloed data or redundant technology systems. It can prevent revenue leakage, inefficiencies, and unfavorable customer experiences. Optimizing the order-to-cash process can help overcome some of these common challenges in merger integration:

• Revenue leakage: Failure to automate order-to-cash processes can result in billing errors and unpaid invoices.
• Unfavorable customer experiences: Operating with different CRM and ERP systems can result in confusing contract and invoicing experiences for customers.
• Higher Costs: Supporting redundant systems, processes and distribution models leads to inefficiencies in technology and human capital investment.

Some additional benefits of O2C automation are:

• Organizations save time and effort spent on checking orders, general administration, and managing receivables
• Lower rate of late deliveries due to streamlined processes
• Entire sales cycle operates in a single integrated system
• Power to develop strategies based on real-time insights on pricing, contracts, products, customers, delivery and account receivables

Indisputably, finance leaders agree that O2C impacts an organization’s bottom line and thus it’s imperative to optimize the process.

If your organization is adopting or expanding revenue streams based on recurring or usage and services-based business models, it is time for you to evaluate your order-to-cash processes. RecVue’s unified platform integrates with any CRM, ERP and front-end order processing systems, enabling customers to improve efficiencies across order-to-cash, revenue and general accounting, while gaining real-time access to data. Finance groups are able to increase accuracy and timeliness of billing and invoicing and aggregate billing information in a single system to improve analysis and forecasting. RecVue’s monetization platform includes a 360-degree view into the entire contract lifecycle, rules-based attribute pricing, complete order-to-invoice capabilities, pay-side management for third party obligations, and robust analytics and reporting.

RecVue is the only order-to-cash automation platform powered by big data that is designed for high-volume recurring revenue models. RecVue’s solution helps enterprises manage their innovative business models and empower them with complete control over all aspects of their recurring revenue contracts at scale, while still maintaining flexibility for monetization innovation. With RecVue’s superior monetization platform, enterprises can meet the compliance requirements set by the new revenue standards. The result is increased revenue growth, faster time to market and total visibility into all revenue streams.

Reach out to us today for an order-to-cash and recurring revenue assessment and let us show you how smart monetization can transform your business growth.