Check out this entire article that informs you about the revenue recognition NetSuite module, its features, advantages, uses, and everything else you need to know before installing the module in your business operations.
NetSuite is quite a commonly-used and widely-sought enterprise resource planning tool globally. The online cloud-based solution is a set of tools or a suite of tools that tackles various tasks and requirements of the business. To meet such tasks, there are various modules or sub-tools of NetSuite that allow you to ease up specific tasks of the business and its operations.
One such module is revenue recognition NetSuite.
What is Revenue Recognition?
Revenue is one of the most important and unignorable elements that keep a business up and running at all times. Revenue allows the business to gain profits and/or make important investments for the betterment and growth of the business. In layman’s terms, revenue is recognized when the business sells a product or service and accepts payments for the same in the due time or by the expected date.
However, there are certain cases where the process of recognition is tough as the delivery of a product(s) or service(s) would take a huge time. In such cases, it becomes quite tough for the business to figure out the time and source of revenue. This is something that the process of revenue recognition can help you with.
The process of revenue recognition helps the business with huge operating periods to determine the accuracy of the collection and recording of the revenue in the books of accounts.
1. Problems Associated with Revenue Recognition
As you must have understood from the definition of the process above, revenue recognition can be very tough for businesses where the period of operations is huge. Hence, because of this increased period, some problems may surface:
2. Complex Process
When the process of revenue recognition is considered, in general, it is a very complex and strenuous matter. Even the experts in the field may face problems and present inaccurate results if the task is neglected even by the least.
3. Inconsistency
As most businesses work on project-based tasks, thus the increased period, there is always an inconsistency in the flow of data. This makes it complicated for the business to recognize the revenue when it’s actually due and creates problems while decision making.
4. Human Errors
One of the most common problems related to accounting and recognition of revenue is human errors like mistakes, omissions, and others can appear. These errors can affect decisions as well as other attributes related to the matter. Moreover, the chances of drastic damage to the business are also increased due to these errors.
5. Problems with Management
Another problem associated with the revenue recognition process is the problems in managing the process and techniques related to the concept.
6. Ineffective Decision-Making
When decisions are taken on the basis of faulty or inaccurate data, the same can have adverse consequences for any business rather than improving it.
Whatever the problems may be, revenue recognition NetSuite can easily tackle all these problems for you and stimulate growth. Let’s understand how.
Smoothen The Process Of Revenue Recognition
What is the NetSuite Revenue Recognition Module?
The revenue recognition module of NetSuite is a module or a sub-tool that allows the business and tool users to understand and figure out the sources and periods of revenue. The module alone can take care of all your revenue recognition requirements like the recording of revenue, useful allocation of the funds received, and creation of revenue-centric reports for your help. All the services offered by the module for the recognition are compliant with the accounting standards of different domains.
You may wonder what services or features of the module make it so reliable. There are certain qualities of the module that make it quite efficient for businesses. Check out these features in the next sections of this guide.
Features of Revenue Recognition NetSuite
Here are some of the most advanced and well-acclaimed features of this module as a helper for the business in recognition of revenue and taking care of various other tasks associated with NetSuite revenue recognition.
Customization Features
Let’s start with the best. The best part about the module is that it is highly customizable. As you know, different businesses may use different techniques or formulas for revenue recognition. The module understands this and thus allows you to customize one or more methods or formulas for revenue recognition and then process and present the data in the same manner.
NetSuite revenue recognition module reduces the need for the business to set specific in-house employees for recognition and automates the whole procedure. The best thing is that the business can easily overlook and make the required changes to the processes as and when necessary. This provides the freedom to follow the required code of ethics and reduces the chances of manual execution of tasks to a great extent.
Another great thing is that the business can focus on the necessary or business-influencing tasks rather than the regular ones. This helps in saving the time as well as resources of the business and its personnel. Additionally, when the operators of NetSuite specify the different sale parameters on different products and services via automation, the chances of errors and omissions are reduced.
1. Planner and Recorder
When the tenure or period of operations is huge, the business can divide the revenue recognition period into certain levels or periods. At the end of such periods, a small amount or percentage of the revenue will get credited or recorded to the books of accounts automatically. All this is done quite easily with the help of revenue recognition NetSuite.
The module allows you to set different project-specific data and targets to help you manage the revenue. This means that you can set various thresholds and barriers for different projects and record or recognize the revenue accordingly. Whatever the dynamics or stretch of the project may be, the NetSuite revenue recognition module can help you control everything and anything to the desired extent.
2. Plan Creation and Storage
A business may deal in different project-based work for different tenures and scopes. This creates an uneven flow of revenue. But with the help of revenue recognition NetSuite, you can set different plans for different projects and use them as required. These plans can also be store for further usage and use when one project ends and the other initiates.
All the plans are highly flexible. Hence, it becomes very easy for the business to introduce new changes to existing plans and make them accurate for different projects. Moreover, you can also set the plan to a certain extent or period if not permanent. All this shows that the module is so easy to modify that any business can make the most out of its features quite easily.
3. Forecasts and Insights
If you implement the revenue recognition NetSuite module in your business, then it will record and track the changes in sales and revenue. This recorded data can then be used by the platform to provide data related to projected sales in the coming period, the expected revenue from the existing/ongoing projects, and the possibility of sales in the future.
All the data escort from the module can be use to make future decisions. As these decisions are taken using actual and factual data rather than projections, the accuracy of such decisions improves. This means that the business would be ready for any challenge that comes along the way. The business can also figure out the harmful or revenue-affecting patterns in the business and fix the same while the time is right.
4. Effective Reporting
Another great advantage of the NetSuite revenue recognition module is that it allows you to get accurate and result-centric reports from the platform. NetSuite is quite popular for its interactive dashboard that shows and presents straight facts, data, and reports to the business. All these allow the business to understand the actual status of any attribute related to the business and attract investors. Moreover, the same data can also be use by the management for acute decision-making.
Reports provided by the platform are highly-customizable as well. You can get specific revenue reports for specific tenure, specific pricing, and specific projects. There are a plethora of filters and options available to you. All these make the reporting structure highly customizable and useful for the business. Your business or the NetSuite operators can use these filters to create precise reports for the business and use them as and when required.
The best way to avail yourself of these features is to seek the help of third-party NetSuite ERP experts. They will allow you to undergo NetSuite training in your organization and teach the assigned personnel how to use and manage various attributes of NetSuite including its smart modules and NetSuite integrations. The training will allow all to get the most out of the ERP solution with ease.
So, these were the top or the best features offered by the module to all. Now let’s have a look at the advantages of using the module in any business.
5. Benefits of Revenue Recognition NetSuite
If you decide to proceed with the module and install or implement it in your business, then your business can avail of these benefits or advantages with ease:
6. Audit-Centric Data and Reports
The platform provides audit-centric data and documents to you for ease. You can use all the data in case of an audit and present the same to the auditors readily. This allows you to reduce the time and effort of the audit as well as your business teams quite easily.
7. Accounting Standard Compliance
You can rely on the services of the NetSuite revenue recognition module as it is highly compliant with the accounting standards set by various organizations. This ensures that your data is always ready for action and presented in a trustworthy manner.
8. Automation of Recurring Revenue
When it comes to the recording and management of recurring revenue, then most individuals stay away from the task as it’s very manual and effort-taking. However, the RR module of NetSuite automates this process and makes it easy for the business to recognize the business whenever necessary.
9. Higher Efficiency
Another great advantage that you get from the module is the higher scale of efficiency. As the whole process of recognition of revenue automates, you can easily ensure that the efficiency and accuracy of revenue increases.
10. Accurate Forecasts and Reports
As said earlier, with the help of the revenue recognition NetSuite, you can create reports derived from actual and reliable data. Moreover, this data can also be use to make growth-stimulating and accurate decisions for the overall betterment and ease of the business.
