Harnessing the Power of Microsoft Dynamics 365 Finance’s Revenue Recognition Tools in the Pharmaceuticals Industry
Posted on: July 31, 2023 | By: Fred Liu | Microsoft Dynamics AX/365, Microsoft Dynamics Manufacturing
In the pharmaceutical industry, with its intricate revenue structures, the management of revenue, especially from multiple elements like products, services, and subscriptions, requires accuracy and precision. The key to effective revenue management lies in successfully breaking down multi-element orders so that revenue can be recognized based on company-specific and industry-specific guidelines. Microsoft Dynamics 365 Finance’s Revenue Recognition Tools can streamline this process, offering a boost to revenue management and recognition.
It’s important to note that revenue recognition, including bundle functionality, isn’t supported for use in Commerce channels like e-commerce, POS, or call center. Therefore, items configured with revenue recognition should not be added to orders or transactions created in these channels.
Optimizing Revenue Recognition Processes
Microsoft Dynamics 365 Finance’s Revenue Recognition Tools come with a flexible framework that allows you to define company-specific rules for recognizing both the revenue price and the revenue schedule. With this feature, you can perform tasks like:
- Allocate Revenue: This helps to ensure that the appropriate revenue price is recognized based on the value of the components on multi-element orders.
- Defer Revenue: Revenue can be deferred based on a revenue schedule representing the contractual timeframe and percentages for recognizing revenue over time.
If you would like to learn more about the basics of Microsoft Dynamics 365 Finance’s Revenue Recognition Tools, you can check our blog here.
The Benefits of Effective Revenue Recognition
- Automating Revenue Recognition: Microsoft Dynamics 365 Finance’s Revenue Recognition Tools automate the process of calculating and recognizing revenue based on predefined schedules and conditions.
- Improved Regulatory Compliance: These tools ensure compliance with accounting standards such as IFRS 15 and ASC 606.
- Enhanced Financial Reporting and Forecasting: These tools offer the ability to generate detailed revenue reports and provide forecasting tools that use historical data to predict future revenue trends
- Streamlined Contract Management: Microsoft Dynamics 365 Finance’s Revenue Recognition Tools provide a comprehensive solution that simplifies the management of long-term contracts, providing the ability to track performance obligations, modify contract terms, and more.
- Enhancing Customer Satisfaction: By ensuring accurate and timely billing, Microsoft Dynamics 365 Finance helps pharmaceutical companies avoid discrepancies and misunderstandings with customers, fostering stronger relationships and increasing the likelihood of repeat business.
Next Steps
If you are interested in learning more about harnessing the power of Microsoft Dynamics 365 Finance’s revenue recognition tools in the Pharmaceuticals Industry, contact us here to find out how we can help you grow your business. You can also email us at info@loganconsulting.com or call (312) 345-8817.