Now that we’re into the third release of Advanced Revenue Management (ARM), we’re starting to hear more and more people asking about it. Whether you’re thinking about implementing a revenue module in NetSuite for the first time or if you’re currently using the previous module and are curious about migrating, here are some common questions we’re asked:
What benefit do I have migrating to the new module?
Great question! I get this a lot.
- Are you frustrated with the inability to change the end date of a schedule in progress?
- Would you benefit from seeing both recognized & planned revenue by period in the same report?
- Are allocation calculations a mystery and you wish you could see more detail? Or perhaps you’d like to retire the classic allocations spreadsheet, that’s used to calculate revenue and then manually keyed into NetSuite.
All of the above and more are solved with Advanced Revenue Management! You can now:
- Change the end date for one or more items at once and NetSuite automatically recalculates the remaining periods for you.
- The updated Revenue Recognition Forecast Report now allows you to toggle and see both planned & recognized revenue by Period or Classifications for the range selected – at the same time!
- Full traceability to the allocation details with drill down capability back to the sourced Fair Value record and formula used in the calculations. Here you can see that the residual method was triggered automatically and therefore the PS item will be recognized at its VSOE allocated price and the remainder to software:
- Fair Value (BESP / VSOE) Price lookup during revenue allocation calculations now has greater flexibility by dynamically choosing a value based on standard segments (Department/Class/Location/Currency/Subsidiary/Accounting Book) or custom dimensions. For example, if you’re both a B2B and B2C business, NetSuite can dynamically select the correct BESP/VSOE Price based on the type of order.
- These values can be maintained via CSV imports and also now have Start & End Dates allowing you to more easily make updates as your price lists change.
- 2 Release Updates also now allow:
- Expense Allocations on Revenue Arrangements aligning expenses along with revenue dates.
- Scheduling of Revenue & Reclassification Entries for these processes to run automatically as you wish: daily, weekly, monthly.
- ASC606 Transition path.
- Ability to map Start & End Dates from source transactions (not previously supported in ARM– this essentially brings back the same functionality as the Rev Rec Start & End Dates available in the previous module) .
When is the right time to migrate?
The time is right when you’re ready. You might first want to think about how the dreaded ASC606 rule changes may impact you. If you haven’t spoken with an expert yet – now would be the time to start having those conversations. At least have a base understanding of how you may be impacted by the changes. Knowing this up front helps us during the design phase. For instance, if you will need to allocate revenue to additional items than you’re currently tracking now, we can incorporate that in the setup so that your transition path to ASC606 on your effective date is a bit easier.
Is the previous Revenue Recognition Module going away?
Not “yet”. NetSuite will continue to support you with the previous Revenue Recognition module, however they are not progressing it any further. They haven’t communicated any dates of which they will force current users to migration, but we can imagine that the day will come eventually – years down the road though.
What does the migration path look like?
Everything starts in a Sandbox account. There’s a fair amount of testing that’s involved with the configuration and training of ARM that this must be first completed in Sandbox and then replicated in your Production environment. Once ARM is enabled in an account – it cannot be disabled.
Our high level approach is:
- Analyze – evaluate and discuss all current revenue scenarios
- Design & Configure ARM for each of your scenarios including updating existing Items, loading Fair Value prices, configure formulas, etc.
- Testing & Training in Sandbox
- Deploy to production
- Migrating all Item updates, Fair Value Prices, and etc. as were completed in Sandbox.
- This step needs to be coordinated for a time that works best for your organization. Once ARM is enabled all newly entered transactions will flow through the new module from that point forward.
- Any existing in process Revenue Schedules will continue to run out and be booked each period from those schedules during the same month end Generate Revenue Journal entries process. This one process will book entries for both the newly generated ARM Revenue Plans and your previous Revenue Schedules.
- Optimize & Support
- Through your first few weeks and period close, we can assist with training, report & custom search writing to help make the system work best for you.
How do I get started?
RSM has been implementing Advanced Revenue Management since its first release in 2015.2. After personally filling a few defects along the way and watching NetSuite’s quick response to resolve – this is a great time to seriously consider migrating. I’ve seen several clients now ditch excel workbooks and enjoy the automatic calculations for allocations.
If you’re unsure of how ASC606 may impact you, let us help. RSM is uniquely positioned to bring both ARM and ASC606 experts to the discussion and planning. RSM has certified Advanced Revenue Management consultants ready to help you today.
If you would like to learn more about Advanced Revenue Management or NetSuite in general please contact RSM at firstname.lastname@example.org or by phone at 855.437.7202 .
By: Jill Nadeau – Boston NetSuite Solution Provider