Revenue Management
Automated Revenue Recognition
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Revenue recognition for software companies has never been more complex; in fact, it's one of the most important and difficult accounting functions faced by this industry. Companies must keep pace with the ever-changing market, manage the complexities of multi-element contracts, and comply with SEC and other stringent regulations, such as Sarbanes-Oxley. To calculate revenue recognition, most companies have resorted to complex spreadsheets, whose management becomes increasingly difficult and inflexible over time. Moreover, many companies are trapped in an error-prone, journal-entry process, which is disconnected from the supporting revenue calculations.
Since NetSuite's revenue recognition software capability is not a bolt-on product or external application, key business processes such as revenue calculation, recognition, and reporting are fully integrated, which provides greater ease of use, better data integrity, more visibility, and higher flexibility than competing solutions. With NetSuite's software industry solution, companies can easily automate the calculation and recording of revenue. NetSuite also provides revenue recognition with line-item visibility and detailed reports to support internal, external and regulatory compliance requirements.
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- NetSuite supports AICPA, FASB and SEC regulations (including SOP 81-1, SAB 101, and EITF 00-21). NetSuite also accommodates the requirements specified in SOP 97-2 & 98-9 relating to Vendor Specific Objective Evidence or VSOE, including the accommodation of the Residual Method and a separate VSOE price for every item. Percent Complete Revenue Recognition allows companies to recognize revenue in conjunction with the completion of a project.
- Reduce or eliminate the use of spreadsheets, as well as needless data transfer across multiple systems.
- Reduce the cost and time of calculating, recording and reporting on revenue recognition.
- Offering better accuracy, fewer errors, greater ease of use, and stronger data integrity, NetSuite surpasses multi-system or manual solutions.
- Checks and balances—ensuring the proper review, approval and execution of revenue due to be recognized—leads to higher accuracy.
- Since all the data is tightly linked, companies have full visibility from any invoice into its associated revenue-recognition schedule(s).
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- Revenue-recognition templates allow you to define revenue-recognition methods and apply them at the line-item level of your invoice.
- You can associate a template to a good and service, such that the related recognition rules apply whenever that good or service is sold.
- Use either pre-packaged templates, which capture common recognition methods, or create your own highly specialized custom templates.
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