Revenue RecognitionSeptember 2, 2022
A recent webinar, “Navigate Inflation Risk with Streamlined Lead-to-Revenue Operations,” examines how the current economic conditions impact Quote-to-Cash and how technology can help collect cash faster and automate revenue recognition for more efficient operations. Lisa McLure, Regional Vice President of Salesforce Revenue Cloud moderated the panel that included Meredith Schmidt, EVP at Salesforce Revenue Cloud, Brook Hughes Fates, VP of Revenue at Salesforce, and Amanda Martinez Carrillo, Sr. Director of Solutions Consulting and Technology Evangelist at RightRev.
As inflation and potential recession riddle headlines, the common sentiment from investors and customers is that cash is king, and companies should heavily evaluate cash flow. As such, collections are a vital function for any company, and that department’s operational efficiency is essential to understanding who talks to customers about the open invoices and sales opportunities. Technology, like Salesforce Revenue Cloud and RightRev, can help provide the data and insights into understanding the business-critical processes that drive collections and recognize revenue without risk.
Understanding how your customers’ buying behavior and preferences have changed during inflation or other economic factors is imperative to grow and retain sales. You can effectively keep customers and stay competitive by offering flexible buying and payment solutions. Thus, technology solutions that offer flexible pricing configuration and allow easy management of contract modifications for all revenue models enable companies to scale faster and optimize operational efficiency.
Transformation drivers, such as inflation, lead businesses to evaluate if their tech stack provides the flexibility and agility needed. Transformation projects typically seek to replace inefficient processes and system limitations that create delays in daily operations and lack the flexibility to adopt new go-to-market strategies. Traditional approaches of focusing on one process area at a time are no longer the formula for success. Revenue operation requirements need to be looked at holistically, include all stakeholders, and identify dependencies from the beginning of the project. Therefore, creating a data model that drives automation while enhancing operational efficiency should be the focus of any transformation project.
When optimizing revenue operations, it is crucial to consider the finance policies and the downstream impact. Manual data manipulation can be automated to cleanse, transfer, and filter data between systems. Automated solutions eliminate unnecessary reconciliations and reduce the risk for the accounting team by ensuring data accuracy. Throwing bodies at the problem and doing manual workarounds is not the answer to improving operational efficiency as it doesn’t seek to optimize the inherent pain with the current process. In addition to evaluating strategies holistically, looking at reporting requirements early on in the project is another factor to consider when evaluating Quote-to-Cash optimizations and looking at technology solutions to fix the inefficiencies.
To prepare for changing economic conditions, Salesforce themselves are challenging their processes and thinking about how to optimize automation and focus on the things that matter, like the company’s growth and more strategic initiatives. Therefore, informing from a forecast, cash flow, and compliance standpoint is vital to provide strategic guidance.
Addressing the silos between sales and finance processes will help uncover the opportunities for improvement in collecting cash faster and operating with agility. Quote-to-Cash transformations are 70% about establishing the correct policy and process before implementing technology. The more you consider what processes can be simplified ahead of time, the more successful your technology implementation and adoption will be. As Brook states, “Revenue recognition and RevOps are attached at the hip; there’s no doubt about that.” The interdependencies between the two teams are infinite. Make sure you have the operations and technologies to handle the complex revenue recognition. Revenue operations aim to support the operational efficiency of the front and back-end teams and need the agility to support the needs of both teams.
Brook also states, “you need to have that rev rec layer, which is a transition layer between the CPQ and the ERP that gives us the flexibility to support new models and initiatives and allows sales and finance to achieve their common goal.” Many customers attempt to handle revenue recognition in either labor-intensive spreadsheets or their ERP, but revenue recognition technology that works with your existing Quote-to-Cash workflows eliminates data silos and the risk of error. RightRev uses approved Salesforce Quotes and Orders to generate Revenue Contracts configurable for One-time, Recurring, Evergreen, and Event-based calculation methods. Standalone Selling Price (SSP) calculations are built-in and easy to configure for Revenue Allocations, and the process of posting revenue to the ERP is automated with Journal entries for period close.
When a new transformation driver such as inflation, IPO, or M&A calls for a new optimization strategy, it’s crucial for teams to consider options for application consolidation without manual intervention for data cleansing between systems and to have a seamless output and integration to financial ledgers. The flexible configuration needed to optimize and scale back-office processes begins with integrated, flexible operations in the front office, which can be tied together with policy and rule triggers, for example, through RightRev.
RightRev seamlessly connects to Lead-to-Revenue data within Salesforce for a single-source-of-truth system enabling 360-degree customer and revenue visibility. Adopting new technologies that automate manual tasks improves operational efficiency and reduces IT infrastructure cost. If you don’t modernize your business applications and processes, you spend more money on the risk of inaccurate data. When considering the costs of audits, delays in closing the books, revenue restatement, errors due to manual processes, and revenue leakage, you spend more money and effort trying to fix the problems rather than implementing strategies that help drive the business forward. RightRev empowers enterprises to quote and sell seamlessly while automating revenue recognition for compliance with the latest accounting requirements, such as ASC 606 and IFRS 15, to ensure data accuracy. The risk of doing things the way they’ve always been done is too significant not to evaluate your current processes and technologies for optimal Quote-to-Revenue workflow efficiency.
To watch the entire webinar, click and register here.