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Many companies are using spreadsheets in their revenue recognition and reporting process, despite the fact that they acknowledge the risks associated with the use of spreadsheets such as data and calculation errors, lack of security and control, and lack of auditing. I find this troubling because spreadsheet risks violate basic compliance principles and revenue accounting problems are one of the leading causes of financial restatements.


Part of the problem is the fact that most organizations don’t have a single source of clean revenue data. BI can help companies consolidate and validate revenue data across multiple sources such as ERP & CRM modules, billing systems, order management systems, project management systems, and price books.


A medical device manufacturer was using spreadsheets to pull data from multiple sources and perform revenue recognition tasks such as;

  • Applying revenue allocation rules
  • Reviewing sales orders to identify deferred items
  • Performing revenue contribution analysis
  • And reporting on future revenue streams


They found their use of spreadsheets was terribly inefficient because the process was laden with manual intervention and prone to errors. They were also concerned by the lack of audit trails and internal controls, as well as their difficulty ensuring the accuracy and completeness of information.


Using BI they were better able to manage compliance and control. For example the definition of customer varied across internal systems, so they standardized and centralized data definitions and transformations to ensure consistency. And with the increased visibility and transparency across the process they were better able to control and coordinate the handoff off information across different areas of the business like contracts, order entry, and accounts receivable.


Having centralized revenue data and business rules also increased productivity and efficiency. They significantly reduced the amount of time spent aggregating data, generating custom reports, and performing audit activities. It also created more trust in the information because everyone could see where the data came from and what calculations had been applied, so less time was spent arguing about the numbers.


Moreover, their use of BI improved business performance. Because they had more time to analyze the business they were able to better understand the causes of trends and variance and adapt faster. And because they had accurate and complete data they were able to increase the accuracy of the assumptions in their business plans and increase the accuracy of their forecasts.

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  1. Former Member

    This is very useful. Are you planning to publish details of how this was done? Was this built in BW? If so how and where did you manage to build the allocation rules etc.? It will be great if you could provide some details of these.

    1. Dan Everett Post author
      Hi Anand,
      I was not part of the implementation.
      However, I do know that MS SQL Sever was used as the relational database to store the information.
      And MS Analysis Services cubes were then built which contained the allocation rules.
      BusinessObjects was used on the front end.
  2. Former Member
    Hi Dan,

    A vrey interesting topic! I completely agree with your point.

    I understand that you were not involved in the implementaion, but where can I find more details in this regard. I would like to know whether/how a workflow can be enabled if a revenue recognition process will  need engagement and approvals from multiple departments.


    1. Dan Everett Post author
      Hi Yuling,
      If you give me your contact info, I will see if I can connect you with someone who could talk to you about workflow.

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