Let’s Understand What Revenue Management Is


You might have heard about revenue management till now as it is a really important part of business growth but most people, especially startup owners, have no idea what this is and why it is really important for a company. We can say that revenue management is basically applying analytics that are well-organized in order to forecast the behavior of the consumer at retail levels while boosting product price and accessibility. The goal is to basically enhance the current revenue growth.

In many cases revenue management is handled by a consulting company. The situation when this is not the case is when we reach a corporate level that can invest in the development of a really complex sales department that can handle something like this.

Establishing a technology that can centralize and simplify revenue management is quite important for the company. In the modern business world companies prefer using cloud technology since finance personnel can easily link with different systems, automate the processes and even review the overall performance of the business. The main complexities that have to be handled are the following.

Regulatory Compliance

We now have to deal with many difficult to infer and complex regulations. Firms are going to implement different non-standard agreements and absolutely all of them have to be built and analyzed with the purpose of being sure regulations are respected.

Internal Controls

Experts will always tell you that revenue recognition is really important for various things, including the internal controls that will come from auditors.

Forecast Visibility

It is really difficult to forecast revenue. Normal income statements are not going to differentiate between the frequent revenue and the once in a while revenue.

Productivity Of The Employee

There are many organizations out there that now use spreadsheets in order to analyze revenue accounting activities that are really important. You can use both complex and silver spreadsheets but it is important that everything is managed properly. The advanced spreadsheets generally have errors and will be really hard to audit.

The problem is that analyzing employee productivity is something that is really hard to do. This is especially the case when referring to the larger companies. In this case we need to have a complex system implemented and that is hard to do when you do not really know how this operates.

Automating Revenue Management

Firms now try to do all that they can in order to automate revenue management. The goal is to accomplish compliance that is enhanced, reduced costs for the entire business and a better visibility. The automation process will encompass all the organization’s functions and we are faced with much more than starting with IT departments. Optimizing and streamlining processes needs to be done if you want substantial results and the experience of someone that really knows what to do is vital.

On the whole, revenue management is something that you should always take into account for the best possible operation of a company. It identifies what works and what does not work, with the main purpose of automating making decisions that would increase company revenue on the long run.


Boris Dzhingarov is a freelance branding & marketing consultant, advising companies and businesses on all aspects of internet marketing, SEO, web design, graphic design, and PPC (pay Per Click). He is the founder of Dzhingarov.com , www.traveltipsor.com , www.blogforweb.com , www.healthannotation.com and www.monetarylibrary.com

You may also like:

Or read some more free business tips:

Filed under Improve My Bottom Line. Posted by The Corporate Toolbox on