According to MGI, 42% of companies experience revenue leakage. Given the odds, there’s a high probability that you have some form of revenue leakage you aren’t even aware of.
So, what can you do to prevent and address revenue leakage?
A key approach is to integrate your sales, marketing, and finance systems and automate the movement of data between them. That way, critical deal, billing, and financial information is correctly shared across them and your team can consistently work off accurate, timely data.
We’ll walk through how you can integrate these systems and automate revenue-triggering events. But let’s start by exploring the pitfalls of operating without integration and automation.
Why billing clients manually can be problematic
We all know what our sales teams are like. They’ll orchestrate a deal with a customer in some of the most “creative” ways, from offering aggressive discounts to providing generous payment terms.
Assuming these “creative” deals happen in large numbers within your business, the prospect of entering them into the billing and contract system so that every invoice goes out with the properly-negotiated contract commitments, discounts, etc. can prove difficult.
Inputting these terms manually can lead to human errors, which can have the unintended consequence of billing customers improperly. When this happens, one of two negative consequences can arise: you either leave money on the table, or worse, over-charge the customer, which can lead them to leave your business for a competitor who’ll bill them correctly.
Automate revenue-triggering events to avoid losing money and overcharging clients
Many of the events that occur during the lifecycle of a customer subscription can influence revenue, such as a customer using more than what they’ve contracted. You can ensure that the appropriate stakeholders become aware of such events by automating them. For instance, a technology such as webhooks allows a platform like Workato to be alerted of an event and take the appropriate set of actions through a workflow.
A good example of this would be a scenario where a customer has used 80% of their allotted consumption for a service and a data traffic system needs to be notified to throttle their usage bandwidth so that they don’t exceed their contract. Alternatively, when they reach 100% of their usage allotment, a notification needs to be sent to the system to either suspend the account or trigger an upsell initiative.
These types of automations ensure that the customer doesn’t receive surprise overage charges on their bill. They also ensure that your business isn’t losing money on the uncharged use of the system if the plan is a flat rate subscription with no overage protection.
The last mile: automate revenue reconciliation to help keep your business compliant
Once you’ve automated both the deals moving into your billing system and additional revenue and billing events that span the customer lifecycle, you’ll need to get this information over to your financial systems so that the finance team can ensure that everything is compliant and recorded correctly.
There are lots of different types of revenue-triggering events that are important when the finance team works on revenue recognition. This includes everything from the contract length to the invoicing schedule.
Automating the delivery of this information ensures that your business has the right financial information to make key decisions off of and that they aren’t reporting “expected” revenue that hasn’t actually been billed or collected yet.
Final Thoughts
There are many different ways a company can experience revenue leakage, but human error is often at the center of it all. To prevent these errors and keep your billing processes running smoothly, you should look to automate your revenue-triggering events. Over the long run, this will only benefit your clients, sales reps, colleagues in finance, and—of course—bottom line.
Ready to get started?
LogiSense, which provides a usage-based and subscription billing platform, can help your organization automate billing via the connectors they’ve built with Workato’s Embedded Platform.
