Flexibility and Agility are Important in a Revenue Recognition Solution

By Mike Morini

There are a lot of different ways a business can make a profit. I have discussed various recurring revenue models and service provider successes in a couple of my previous posts. In general, we can say that the best-run businesses are typically able to understand the current and future needs of their target market segments, offer the products and services that best serve these customers, and use all of the possible channels that optimally serve their business goals. This is a much easier process when the business faces little or no competitive pressure and can essentially dominate its markets with a basic standard offering.  This is a lot more challenging when the business is driven to sustain ongoing innovation in its monetization strategies.

Let’s consider some of the forces at work here. The use of creative recurring revenue models and the associated enabling technologies have become a primary recipe for businesses to consistently differentiate themselves in a positive way. Today’s customers crave a “perfect” or “best-fit” solution for their particular requirements. They assess the service’s value, real or perceived, around its utility, simplicity, and convenience as well as its cost to them. The recurring revenue model that works for one customer won’t work for another customer, and the customer that the model works for today may demand something very different tomorrow, or churn away to another service provider.

So the billing solution must be highly flexible and easily adaptable to enable the timely innovation required by new recurring revenue opportunities, allowing the agile business to lead in its markets, to minimize churn, or to respond quickly to direct competitive pressures.  Would you expect that you can just throw any old revenue recognition application on the backend of this powerful billing solution?

The revenue recognition management solution must be equally flexible, adaptable and agile while still handling the additional integrity challenges unique to accounting and control applications. It should be capable of managing revenue recognition for a seemingly unlimited number of charge types employed by the service provider. And it should encompass a broad spectrum of recurring billing, provisioning, and special case transactions that always seem to be present between service providers and service consumers.

This means it delivers timely, accurate, and consistent accounting, analyses, and reporting support for:

  • All variants of the primary recurring revenue business models:
    • Flat- or fixed-rate subscriptions for services provided per period of time, e.g. monthly.
    • Usage-based charges per actual use or per unit of service consumed, e.g. pay-per-view.
    • Combinations of subscription and usage, e.g. a fixed service level plus overage charges.
  • All variants of the primary recurring revenue pricing strategies and tactics, including Trials, Promotions, Freemium, Bundles, Prepaid, Postpaid, Unlimited Usage, Tiered, etc.
  • A closed, fully integrated solution for all billing, earned revenue, and special case transactions, such as credits, adjustments, upgrades, renewals, cancellations, voids, write-offs, refunds, and taxes.

Imagine going through all of the cost and effort to finally get your recurring revenue monetization strategies up and running on the right billing platform, with the agility that enables your business to quickly and easily adapt to new opportunities. If your revenue recognition management solution limits your ability to fully use that billing platform, it‘s like putting a throttle-control device on your Ferrari.

So make sure you have the right flexible and agile revenue recognition management solution, one that only enhances but never limits the scope of opportunities possible for your recurring revenue business.

Let us know how your revenue recognition efforts are working for you!