Strategic Revenue Distribution: NetSuite ARM in Lump Sum Spheres
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Visualize a situation where your business receives a substantial sum in a single payment? How does this impact your financial management and tax records? A system to allocate your revenue to multiple months based on your criteria will be helpful.
This is where NetSuite Advance Revenue Management (ARM) plays a crucial role in your business's financial operations.
Problem Statement
A consultant in the IT transformation industry approached us because their client faced a challenge. There were issues with effectively managing lump sum revenue. The existing system has limited capabilities, along with manual intervention and calculations.
They wished to have a better Revenue Management feature to optimize financial management. They also wanted to gain better insights using the new feature. The goal was to automate revenue allocation across multiple months. Among the goals were including specific rules for distribution and generating monthly revenue recognition journal entries automatically.
What We Suggested
We proposed the implementation of NetSuite ARM to address the client’s revenue allocation challenges. The solution automates processes, which include:
1.Automated Revenue Allocation: NetSuite ARM automates the monthly allocation of received amounts based on predefined rules and criteria.
2.Monthly Journal Entries: Utilize NetSuite ARM to generate monthly journal entries, reflecting the automated revenue allocation. A NetSuite journal entry is a record of financial transactions within the NetSuite accounting system. It details debits and credits to specific accounts for accurate bookkeeping.
3.Deferred Revenue Integration: The NetSuite ARM feature incorporates deferred revenue. It provides a more accurate representation of financial status and contributes to clean financial reporting.
Quantifiable Benefits of NetSuite ARM
•Advanced revenue management utilizes a rule-based event handling architecture to automate revenue forecasting, allocation, recognition, reclassification, and auditing. It complies with the ASC 606 revenue standard.
•Automating revenue management reduces time during the closing process, potentially lowering overtime (25-50%).
•Improves forecast accuracy by providing real-time information on committed, deferred, and recognized revenue.
•Allows businesses to add new revenue streams to drive growth.
Customer Success
Following the successful implementation of NetSuite ARM, our client experienced significant achievements:
•Real-Time Financial Reporting: The solution provided our client with advanced real-time reports on financial activities, along with detailed insights into revenue distribution across months.
•Better Finance Management: NetSuite ARM streamlined the overall financial management process, reducing manual efforts and improving the accuracy of financial transactions.
•Future Recommendations The deferred revenue in NetSuite ARM contributed to a more comprehensive understanding of the client’s financial health, enhancing decision-making capabilities.
Key Achievements:
• Reduced manual effort in revenue allocation by 60%.
• Improved accuracy and reliability in financial reporting.
Way Forward
The NetSuite ARM feature efficiently allocates received revenues to your preferred periods, ensuring stable financial operations. This eliminates concerns related to financial reports and generates automated journal entries.
Does your process involve receiving significant revenues at once and are you struggling with precise allocation? Adopt a separate allocation method for proper financial settings is crucial. The expert team at Jobin & Jismi is ready to assist you and provide complete guidance. Feel free to reach out to discuss your specific needs.
