When cash lands in your business account from one of your customers, you might be tempted to update it in your revenue part of your accounts. But, the truth is that the cash received is not revenue, yet! Considering cash as revenue can be fatal for your business. The cash becomes revenue once you have earned it. Till you have delivered the products or services promised to the customer, the cash does not become revenue. Till then, it is just a liability as the customer can ask for the money back if they want a refund when you do not deliver the service.  If you spend the money before providing the service, it can lead to problems for your business later on. Thus, revenue recognition is an important concept that every manager and business owners need to understand clearly.

Today, most businesses have a target to achieve. Whether you are a multinational company or a small business owner, you need to ensure that your business is meeting specific targets. For a company, it can mean the difference between a massive bonus and be asked to leave. For a stockholder, it means selling the stocks of the company or holding it longer. One of the measures of this target is revenue, and it helps drive the success of any company. It is the reason why revenue recognition is so important.

Revenue recognition is simple in some cases such as a manufacturer selling goods that do not contain a warranty. But, in industries such as IT, entertainment, healthcare, real estate and others including fund accounting for nonprofit organizations, where the traditional revenue recognition criteria do not apply, revenue recognition can be quite complicated. Even though the revenue recognition standards can be quite complicated, there is much-advanced software that can complete days of work in a matter of minutes. The software helps companies overcome the obstacles that are often associated with revenue recognition. Thus, there is a need for companies and business owners to have proper revenue recognition software in place to ensure that their business is running smoothly.   

Let us take a look at the progression of the revenue recognition software over the years –

• When companies first started to realize the importance of revenue recognition software for their companies, most of them just went on to use the simple QuickBooks for it. The main benefit of using the software was its affordability and the ease of use. However, once the companies started to grow, and their sales rose past a specific number, QuickBooks was not able to meet their needs.

• Companies then started to look for better and more advanced software such as spreadsheet software. The software worked for sometime but, certain issues made it impossible to use it properly. There was a constant need for entering formulas and port data from the reports to the spreadsheets that made it time-consuming. Also, there were constant formula errors that were unacceptable. Thus, companies started to look for better revenue recognition solutions.

• Over time, revenue recognition software became more advanced and could handle the needs of the business owners and managers better. All the sophisticated revenue recognition software contains three essential The best software can create a financial statement that is compliant with the accounting standards. Companies often need to perform further manipulations before they can book the revenue and the revenue recognition software can quickly do it. The software also calculates the revenue by hand and book it in the general ledger automatically.

Best Revenue Recognition Software for 2018

There are many revenue recognition software for you to consider. Among the top ones is NetSuite Advanced Revenue Recognition Software that allows business owners to automate their entire revenue recognition process. The software also includes compliance with SEC, FASB, and AICPA regulations. The best thing about the software is that the whole software is a cloud solution integrated with other ERP applications making the revenue management process fully automated. It has a simple dashboard for reporting and monitoring of revenue. The software gets automatically updated for all the changes in the revenue recognition rules. If you are looking for the best revenue recognition software for 2018, then NetSuite Advanced Revenue Recognition Software is the one to pick.