5 Revenue Recognition Methods

Today, businesses are confronted with a high volume and broad range of data that requires effective analysis so that the information can not only be used to enhance and improve business operations, but also provide the business with ability to stay competitive in a business world that has come to rely on technology to maintain profitability. For example: By analyzing the historic data (say for 6 months) and building a data model on the basis of various parameters of a voice usage customer, the potential customers for data usage and other value added services provided by the telco can be identified, who can be targeted by product bundled promotions.

While, investors and creditors rely upon financial statements for taking decisions related to investing in the company, insiders like the management use managerial reports to review performance, and base their decisions, related to execution and control, on forecasted data.business analytics

The principle of revenue recognition, which is included among the Generally Accepted Accounting Principles (GAAP), is an important component of the accrual basis of accounting and determines the conditions where revenue is realized for a given accounting period, irrespective of whether the cash has been received or not.business analytics

Better customer handling: Including the sophisticated tools while planning, the companies can understand the requirements of the customers, and design products according to it. Also, the firms can identify the recurring customers who are more likely to do industry with the organization.business analytics

Therefore, the services need not have to be disconnected for those customers having low credit risk scores, whereas the customers with high credit risk score need to be dealt with lesser tolerance and can be decided for a termination or shifted to pre-paid scheme depending on further data analysis about those customers.

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