- March 8, 2017
- Posted by: Smith & Smith
- Category: Blog
IT services companies are tasked with keeping up with the ever-changing technological landscape of their businesses, in order to increase customer satisfaction.
CFOs in these businesses, while having to work with budget constraints with finding the right skill set, also have to grapple with managing multiple revenue sources in the most efficient way possible.
Note: The above text is excerpted from the Compu Data article “ Top 5 CFO Challenges for Software & IT Services Companies “.
Here we pinpoint the top five CFO challenges for IT Companies:
Timely Deferred revenue and revenue recognition process
Most IT services CFOs often have to spend a lot of time with manually handling compliance, deferred revenue and revenue recognition.
Automate Deferred revenue and revenue recognition process
Choose an accounting solution designed to help companies with complicated revenue recognition and compliance mandates.
CFOs can streamline revenue recognition process, analyze and forecast easily, while and staying in compliance with mandates such as, SOP 97-2, VSOE, and EITF 00-21.
Maximizing renewal revenue & Judging Multiple Billing Needs
Optimizing cash flow is usually is main objective in software and IT services businesses.
However, with a multiple renewal dates customized billing needs, getting invoices and bills out on time could could effect a company’s ability to maximize renewal revenue
Step Up Automatic Contact Renewals
Using an accounting tool that integrates with your CRM system, you can stepup billing, renewal and invoicing as soon as a sale is made.
This prevents accounting misshapes and the late issuance of bills and invoices, helping business maximize their renewal revenue.
Manual Consolidation of Financial Data
With the need to manage multiple sets of books, different products, or software entities operating other different tax IDs, software and IT services CFOs may find themselves strapped for time.
Roll up data into a single consolidated view
With the use of accounting software with consolidated views, CFOs and financials can easily combine financial data into one single view, gainng quick access to to all customer information.
Inability to easy measure project profitability
For IT services CFOs profitability of IT projects can dramatically impact bottom line results.
CFOs without easy access to up-to-the-minute progress, billing and expense reports, may find it difficult to figure out the profitability of individual projects.
Innovative project accounting software
With an out-of-the-box accounting system that has project accounting features, CFOs in IT services companies can easy gain access to project information on the fly.
Allowing finance executives to answer key project accounting questions, such as “which type of project bring in the most margins? Are we billing timely and accurately? ”
Accurate demand Prediction and forecasting
Accurate demand prediction and forecasting aid CFOs in software and IT services companies with planning and budgeting.
Without access to real-time sales and financial data, CFOs are forced to plan ahead without a full view of past and present information.
Real-time dashboards and business intelligence
Real-time access to financial and sales data allows for a more accurate predictive analysis and forecasting.
CFOs need to take advantage of financial solutions that integrate seamlessly with their CRM systems for full visibility into all operational areas of their business.