Revenue recognition and management are significant for any growing business. It gets complicated with the ever-changing finance benchmarks and standards. Streamlining and automating finance operations allow you to get real-time updates and insights. Further, drive your business to meet regulatory compliances.
ERP systems like Oracle, SAP, and Microsoft Dynamics GP are not up to keeping pace with these changes. Hence, businesses lack real-time data visibility, risk of errors, and non-compliance.
What does it mean for your business?
Your finance teams have to rely on complex spreadsheets, which limits visibility, saps productivity, and leads to errors.
If you are facing revenue recognition challenges with your current ERP system, NetSuite offers an advanced module to manage them. Advanced Revenue Management (ARM) is the latest module from NetSuite.
NetSuite ARM module automates your revenue recognition processes and automatically updates to keep pace with the latest compliance standards.
If you are already a NetSuite ERP user, it can be easily added as a module.
How does the NetSuite Advanced Revenue Management module streamlines the revenue process?
NetSuite is the #1 cloud-ERP solution for most SMEs (small-to-medium businesses). NetSuite ARM module supports all the revenue compliance standards, including ASC 605, 606, and IFRS 15.
It supports scalability, automation, revenue forecasting, allocation, recognition, reclassification, and auditing through a rule-based framework.
Our NetSuite Practice Director, Scott Jorgensen at Amzur Technologies, has been working in this space for over 20 years. He has been on every side of the process.
He says that Accounting Standards Codification (ASC) 606 has brought new revenue recognition standards for public and private companies. And, many may not have adequate systems to support the complexities of this new standard.
With the NetSuite ARM module and Multi-Book solutions (also from NetSuite), companies can support their transition to the requirements of the new standards. It can support dimensional and date-driven standalone selling price (SSP) for revenue allocation, automated month-end close processes, support the foreign currency, and unbilled adjustments, etc., — he further added.
NetSuite ARM Modules
- Revenue arrangements: It records details of customer performance obligations for purposes of revenue allocation and recognition. NetSuite ARM module automatically creates revenue arrangements from earlier approved sales transactions.
- Revenue elements: NetSuite ARM stores revenue recognition information that corresponds to individual lines in a source.
- Revenue recognition rules: It stores how the revenue stream is recognized per item. The rules include recognition method, amount source, start & end date sources.
- Revenue recognition plans: These plans are derived from revenue recognition rules. NetSuite ARM forecasts and supplies revenue recognition information for journal entries.
NetSuite Advanced Revenue Management and Recognition module benefits:
- Efficiently meet the revenue recognition standards as it helps in complying with the regulations like AICPA, FASB, and SEC (including SOP 97-2 and 98-9, SOP 81-1, SAB 101, EITF 00-21, EITF 08-01 and EITF 09-03)
- Improve finance productivity and reduce the cost and time of calculating, recording, and reporting on revenue recognition
- Reduce or even eliminate the use of spreadsheets, dramatically reduce errors and gain compliant processes
- Improve accuracy by ensuring the proper review, approval, and execution of revenue to be recognized
- Gain clear visibility and monitoring throughout the recognition process, from summary to detail to Estimated Selling Prices (ESPs) and key variances
- Extend existing Oracle Financials or SAP R/3 deployment quickly and efficiently
- Stay ahead with automatic updates on the latest revenue recognition rule changes
Key features of NetSuite ARM module:
1. Flexible revenue recognition capabilities:
- NetSuite ARM supports recognition schedules for all sales transactions and provides immediate notification when revenue is due to be recognized.
- With multi-currency and multi-subsidiary intelligence, you can meet global business management needs.
- Its integrated workflow enables simultaneous revenue recognition and billing.
- It allows you to recognize revenue using a separate process from billing.
2. Effective Revenue Recognition on Multi-Element Sales:
- You can get exception reports comparing the actual selling prices versus estimated selling prices for better accuracy.
- NetSuite ARM helps you to track and support “units of accounting” and selling prices for all elements of multi-element arrangements by VSOE, ESP, and Third-party Evidence(TPE).
- It also enables you to track and manage ESPs for every SKU across multiple business channels and dimensions.
- NetSuite ARM gives you the flexibility to customize schedules on a per-item basis as this enables automatic reallocation of order value to each line item.
3. Support for all Revenue Recognition rules and regulations:
- NetSuite ARM facilitates automatic recognition of revenue for every line item according to the suitable revenue recognition method.
- The solution delivers complete support and management of ESPs.
- You are always on top of revenue recognition with its latest recognition standards.
- It accommodates the Vendor-Specific Objective Evidence (VSOE) including the Residual method and separate VSOE for every item.
4. Pre-Packaged or Custom Revenue Recognition Templates:
- NetSuite’s Advanced Revenue Management module allows you to use pre-packaged templates for common recognition methods and custom templates to your specifications.
- NetSuite ARM provides revenue-recognition templates to define revenue recognition methods and apply them at the line-item invoice level.
- You can associate a template to a good or service for related recognition rules to apply whenever that good or service is sold.
NetSuite ARM integration:
Would you like to streamline the revenue recognition process and eliminate complex spreadsheet operations? Amzur can help you with NetSuite ARM module integration for your existing ERP applications. Our NetSuite experts effortlessly integrate the module with your existing applications and bring transparency for every transaction.
Being in the industry for the past 15 years, we evolved with our client’s requirements and delivered bespoke solutions.
Can we have a quick chat in the comments section to know your challenges and requirements?