Managing revenue recognition with Advanced Revenue Management

Revenue recognition (rev rec) is an important topic for any company that enters into contracts of any sort with their customers. The financial industry has settled on standards and practices for accountants to follow regarding recognizing revenue from these arrangements, so that investors, governments, and others can confidently compare financial results from all businesses. In the past, without these standards, it was difficult to know what made one company stronger or more successful than others, based solely on its financial reports.

Companies that sell all of their products or services in a very short-term time frame don’t have this problem, since they both bill for their products and receive payments in a relatively short time. However, companies who enter into years-long contracts with their customers, such as cable TV providers or software publishers, must follow these rules so that their revenue reporting...