Some CFOs are looking towards technology solutions to be the differentiator that will give them an advantage in the marketplace, according to Sobczak.
“As businesses try and reinvent themselves, nearly one-third of CFOs look to tech-driven products and services to drive growth,” he said. “Today, they may have a lot of manual processes and have trouble being agile and getting products to market fast. They are looking to do this through tech enablement.”
It is the ability to adapt and scale technologically, through being flexible and agile operationally, that CFOs see as the key to meeting the challenges of an unpredictable future.
“73% of CFOs believe that flexibility and agility are key to making their companies better in the long run,” Sobczak said. “To do this holistically, technology is going to be a very key driver,” he said.
He believes the growth of subscription business models is driving the need to automate revenue accounting more, as this recurring revenue is creating a need to track differently.
“If you are a ship-and-build-type company, you won’t have a lot of needs for variations and contract modifications,” he said. “But as you look for ways to move towards a subscription-based business model, you have to track it differently and account for it a little bit differently. Look to automation tools to track your revenue.”
Something that cannot be ignored during the process to automate revenue accounting is the need for clean data that can be automatically extracted and analyzed.
“Data is key to streamlining the revenue process,” Sobczak said. “As you pull data through the systems, you want to make the data as seamless and streamlined as possible, since you don’t want to manually extract data and load it.”
In the end, while the right technology solution can provide the foundation needed to automate revenue accounting, a cross-functional collaboration between leadership, revenue, IT and financial planning and analysis (FP&A) must be achieved for success.
“Finally, cross-functional collaboration is needed to put a revenue-centric solution in place so they don’t have to do the manipulation at the end.”
Impact on the organization
The move towards a subscription-model requires a different way of thinking from every group in the company, not just IT or RevOps, according to Vaibhav Mahajan, Revenue Automation Specialist for PwC.
“Changing of business models often results in significant operational and compliance risk across the entire organization,” Mahajan said.
Since a subscription model impacts and cuts across several key groups, from RevOps to the CFO, this enhances the greater need for collaboration across the organization.
“For a RevOps manager, the impact could result in a significant amount of time fixing data issues resulting in a long period close cycle,” said Mahajan. “This may include late nights, last-minute reviews, and difficulty recognizing recurring and non-recurring revenue.”