Manage the Big Picture While Mitigating Risk
Channel-related problems and challenges that may you may be struggling with:
- How do I improve sales forecasting with such limited visibility into the channel?
- How do I eliminate stockouts and excess inventory in the channel?
- How do I avoid overpaying commissions and incentives?
- How do I get fully auditable and accurate channel data?
- How do I recognize revenue on a sell-through basis?
- How do reduce or eliminate gray market activity and other revenue leaks?
- How do I ensure I stay in compliance with Sarbanes-Oxley (SOX), SEC, and FASB mandates and guidelines?
- How do I close monthly/quarterly/annual financial reporting faster?
- How do I use channel data to work smarter and give me a competitive edge?
The answer to these challenges is to institute a single system of record that unifies information from all channel activities within a common platform to support business decisions. This means one secure system for global collection of channel data, unified master data and robust, "best practices" for data processing, analytics and business intelligence.
The Challenges of Revenue Recognition and Compliance
Many CFOs, controllers, and finance VPs recognize revenue today based on incomplete, inaccurate, or low-quality channel data, which can result in incorrect financial reporting, imperfect sales execution and incorrect commission payments, among other challenges. Failure to recognize revenue in the appropriate time frames and amounts can also put your company at significant risk of regulatory penalties.
In channel-based environments, risk comes in many forms. One major area that always must be governed is compliance with financial and regulatory mandates. As more companies move from traditional, sell-in models of revenue recognition to sell-through models in conjunction with channel partners, the risks of noncompliance are escalating.
Unfortunately, the majority of existing ERP and accounting software packages don’t accommodate the complex revenue management and compliance needs for sell-through revenue recognition. This forces companies to manage revenue recognition activities outside their standard financial systems by using complicated spreadsheets and manual processes. Since these approaches are error-prone and not scalable, setting up effective controls for risk mitigation end up being an even bigger challenge. See our post on risk, compliance and spreadsheets.
Entomo's Single Automated System With Audit Trails
Entomo addresses the problems of revenue recognition by eliminating complex spreadsheets and ad hoc databases, and replacing them with a single integrated system. Entomo makes it easy to manage complex channel revenue models that are challenging for traditional accounting systems, especially when it comes to managing deferred revenue. All revenue-related information are aggregated, interlinked and stored in a single system with built-in audit trails and automatically enforced controls. Audit and analytics processes are quick, easy and always based on automatically processed high-quality data. Importantly, Entomo provides automated functionality to meet stringent SEC and FASB guidelines on sell-through revenue recognition right out-of-the-box. This substantially simplifies your ability to meet Sarbanes-Oxley (SOX) and mitigate compliance risks.
Entomo's SmartHub channel management solutions enable you to quickly get out ahead of the all these challenges with a cost-effective, highly scalable set of applications that are designed to mesh with your existing financial, ERP and business-management systems. Entomo's cloud-based platform -combined with broad experience across many channel-based industries—offers excellent scalability, flexibility, support and time to value.
Key benefits include:
- Single system of record for channel activities - no data conflicts or inconsistencies - means more time on strategic activities instead of reconciling disparate, often untrustworthy data
- Confidence that all transactions are accurate, valued appropriately and accounted for based on industry compliance mandates
- Optimized inventory management - reduced stock-outs and reduced excess inventory
- Recognize revenue based on sell-through
- Better sales forecasting through reconciled, validated inventory and better channel visibility
- Reliable, scalable and secure solution
- Avoid commissions and incentives overpayments
- Modular approach that meshes with existing business systems
- Minimal impacts on IT support staff
- Improved productivity and accountability for both internal and partner staff
- Enhanced ability to scale channel sales to meet growth goals