ARM offers features to automate Revenue recognition and Revenue deferral.
These features allow the company to recognize revenue independently from billing customers and receiving payments.
Revenue Recognition
Revenue recognition considers when revenue is recognized when it is earned and realized. Revenue is recognized in the period in which goods and services are delivered instead of one they are sold.
Revenue recognition use cases
- Subscriptions and support contracts– Revenue is recognized incrementally throughout the term of the contract.
- Fixed-fee Project – Revenue is recognized at contracted milestones
- Delivery of goods– Revenue is recognized when the contracted order is fulfilled.
- Time and materials services– Revenue is recognized as the contracted services are delivered.
ARM Setup tasks
- Creation of Revenue recognition rules and revenue forecast rules– Recognition method, Amount source, Start and End dates.
- Fair value attributes such as Fair value price list and Fair value formulas can be set up if applicable to the business.
- These will govern revenue allocations in multi element transactions.
Revenue recognition rules and Fair value attributes (if applicable) are then applied to item records.