A global network equipment manufacturing company envisioned establishing a strong, auditable revenue assurance processes and controls for its sales organization. For strategic deals, the client’s sales organization had the power to create non-standard arrangements. As a result, sales contracts may cover multi-year products and services and may have dual or even multiple sales contracts—including unique volume purchase agreements, rights of return, demo evaluations, special acceptance terms, and other exceptional terms and conditions. Due to non-standard sales deals, the existing processes and controls could not consistently capture all revenue deferrals. And with disparate processes and different business owners in the sales lifecycle, the client could not determine the revenue streams and establish proper evidence of revenue, or verify whether the deferred revenue for nonstandard terms was being treated by their policies.

To build a robust revenue assurance framework, our team of consultants first established work groups to channel contracts and orders through reviewing, identifying non-standard terms and conditions, confirming revenue-impacting terms, matching orders to contracts and ensuring internal systems and processes captured appropriate deferrals. We further segmented revenue based on geography, deal sizes, and standard vs. non-standard terms and conditions to conduct a comprehensive contract, customer and transaction review. Trianz experts collaborated with a team of over 90 controllers worldwide to review exceptions and enable decision-making around revenue recognition and reserves policies.

THE BUSINESS CHALLENGE

To track and measure revenue across the lifecycle of complex non-standard deals, the client needed a robust revenue assurance model and a technology platform to automate related finance processes.

THE APPROACH

  • Ensured proper revenue documentation and treatment by performing contract reviews, order matching, system checking, and by interviewing the client's controllers to discuss and uncover problems.
  • Sustained existing controls and defining long-term remediation for future process improvements that would be aligned with the client's IT strategy.

TRANSFORMATIONAL EFFECTS

  • Created a sound, auditable revenue assurance processes and controls on time for the client's external audit.
  • Transitioned into a monitoring phase to take on the responsibility for meeting continued revenue assurance requirements.
  • Outlined a roadmap for fundamental processes and policy changes, and introduced systemic controls aligned with long-term business strategies and initiatives.

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