In the realm of financial management for subscription businesses, revenue recognition serves as the lifeblood that keeps decision-making, financial reporting, and accounting standards compliance in pristine condition.
However, the conventional methods of dealing with revenue recognition can be overwhelming. Subscription management teams often find themselves stretched thin, constantly juggling numerous spreadsheets while grappling with limited resources, making it nearly impossible to keep up.
This is where LISA BusinessPro's revenue recognition automation comes to the rescue. Customers who have embraced this solution have been able to relinquish the burden of day-to-day processes, as everything is seamlessly automated for them.
If you're new to LISA BusinessPro or simply curious about its functionality, let's delve into a concise guide outlining four distinct ways you can establish revenue recognition using Dynamics Finance with .
1. The Accrual Scheme:
Smooth Sailing for Subscription Businesses
If your subscription business experiences minimal changes, the Accrual Scheme is tailor-made for you. This method integrates with the billing process and necessitates future-dated postings. By configuring the billing posting profile and incorporating sales and purchase accruals, the appropriate billing posting profile can be automatically assigned based on the subscription's duration, courtesy of the "automatic billing posting" feature.
It's important to note that a billing posting profile and an accrual scheme must be set up for each subscription contract duration. Moreover, with the accrual scheme, you have the option to split the revenue and allocate a portion directly to your profit and loss during the billing process.
2. Revenue Recognition Add-Ons:
Empowering Control and Flexibility
For those seeking enhanced control over revenue deferral and recognition, the Revenue Recognition Add-Ons offer an ideal solution. Powered by HARP BusinessPro, the automation engine underlying LISA BusinessPro, this approach enables the creation of custom actions that handle revenue recognition independently from the billing process.
Furthermore, you can segment your revenue into different components before posting it to the general ledger, providing granular insights on a product-by-product basis.
3. Revenue Deferrals in Subscription Billing:
Balancing Flexibility and Simplicity
If you prioritize flexibility and don't require intricate revenue allocations, Revenue Deferrals in Subscription Billing is the way to go. This method facilitates monthly revenue recognition postings based on all the orders and credit notes processed during the respective period.
By decoupling deferrals and recognition from billing events, you can maintain a high degree of flexibility while streamlining your revenue management.
4. Revenue Recognition Module:
A Short-Term Solution with Microsoft's Planned Retirement
[Please note that this method is intended for short-term use as Microsoft plans to retire it soon.]
Triggered by the subscription billing action, the Revenue Recognition Module executes during the posting phase. To leverage this module, you'll need to enable the "use revenue schedules" flag and establish a link between your revenue schedule and the billing posting profile.
and Dynamics 365 Finance offer an array of options to streamline your revenue recognition process. Each approach can significantly enhance the accuracy and efficiency of your financial management, ultimately saving you valuable time and effort.
Choosing the method that aligns seamlessly with your business requirements is key. Once you find the perfect fit, you'll experience an immediate transformation—less time spent, fewer errors, and more precise accounts.
If you have any inquiries or need assistance, . Our team is here to listen and provide support.
