NetSuite supports varied business and business processes. While playing a huge role shaping a business in and out, NetSuite focusses on returning profitable value to organizations by streamlining their Revenue Recognition processes and bringing maximum revenue to them.
While each industry works on standard revenue generation mechanism of reducing cost to increase profits – here are different ways of revenue recognition each business follows to exceed their gains by using NetSuite ASC 606 and IFRS 15:
1. Software and Technology Industry
Tech industries usually follow a subscription model and entertain scheduled overtime billing. Using ASC 606, NetSuite allows these scheduled invoicing and billing mechanisms to promote revenue allocations over the contract period.
2.Construction and Real Estate Industry
Revenue is recognized in bits and pieces and the construction industry and usually follows progressive billing mechanisms. Again, using NetSuite, construction companies can create projects and milestones to recognize revenue, ensuring revenue is recognized in line with work completed and costs incurred.
3. Manufacturing and Retail Industries
Manufacturers recognize revenue at one time. This could be before or after delivery depending on what is stated in the contract. Retail industries recognize revenue at point of sale only. However, they bring in discounts and return policies which need to be incorporated in the deal. NetSuite helps both these sectors by having Point in Time revenue recognition and also has item level discounts enabled in NetSuite. Thus, it supports both sectors to streamline their revenue activities.
4.Telecommunications Industry
Telecommunication Industry includes mobile and internet plans. These are further broken down into prepaid and post-paid. They are also subject to one-time and recurring billing models based on quantity and period. All these varied subscription plans can be developed in NetSuite along with their unique revenue recognition models.
5. Hospital and Hospitality Industry
Both working on per bed and per room availability; revenue for these can be scattered and is dependent on services provided. NetSuite helps these industries by giving them the liberty of per day revenue calculation and recognition using NetSuite’s Revenue Recognition rules.
6. Financial Services Industry
This covers banking and other related financial sectors.
Financial services firms often recognize revenue over time particularly for advisory services, management fees and other long-term contracts. The timing for this may vary based on the specific terms of the services provided.
Thus, using NetSuite revenue recognition and recording can be an easy process to streamline operations and accounts receivable department to a large extent, making things simpler for the financial well-being of a company.
