Given the robust business environment today, a modern-day company can have sales orders that include a combination of products and/or services that must be fulfilled or delivered on schedules unique to that specific product or service. Whether equal revenue must be recognized in fixed intervals, or different amounts of revenue must be recognized at different intervals, NetSuite Advanced Revenue Management (ARM) has you covered!
Revenue recognition capabilities are in compliance with current accounting standards (most recently, ASC 606 / IFRS 15). Flexible revenue contracts, known in NetSuite as “Revenue Arrangements”, contain all of the information for the performance obligations (“Revenue Elements”) of a sales contract. Each element is tagged with an attribute, such as a Revenue Recognition Rule, a plan start and end date, and a revenue allocation amount.
These individual attributes, all housed within a single arrangement, control revenue recognition for each element on a sales order. NetSuite’s comprehensive allocation features enable revenue to be automatically deferred and/or recognized accurately for each element of a sales order in the proper accounting period.
While ARM has gained the most notoriety from its ability to handle multi-element software arrangements, NetSuite provides a revenue recognition tool for companies of all sizes and in all industries. NetSuite supports revenue recognition in the following ways:
If you would like to hear more about NetSuite Revenue Management and how its capabilities might be of use to you and your company, contact one of our NetSuite consultants here.