Today Zuora released its 2023 State of Revenue Accounting report, revealing critical challenges that revenue accounting teams are facing as well as opportunities to address the growing demands of the business, increase accuracy and streamline efficiency.
Complex revenue streams are the new reality of modern business, and the report found that revenue teams are under pressure to meet these demands by advancing their skills, processes and technology. For example, as companies innovate, revenue accounting leaders are increasingly feeling pushed to support new go-to-market models, products and pricing. Failure to adapt can lead to lost business opportunities, increased costs, unnecessary risks and a negative impact on the mental health of revenue accounting professionals.
Key findings of Zuora’s 2023 State of Revenue Accounting report include:
– Audit costs are surging with revenue scrutiny: 76% of respondents report that scrutiny from auditors has increased in the past three years, and 65% report concerns about the risk of misstatement because of existing manual processes and control risks.
– Poor revenue processes can lead to poor mental health: 63% of respondents report poor revenue processes affect their mental health, and 19% report having nightmares about revenue data or processes. Additionally, 59% report their revenue accounting team members feel unfulfilled with their work.
– The business expects more from revenue teams: 76% of revenue accounting leaders say they’ve experienced increasing pressure from the business to support new go-to-market models, products and pricing. But 68% report not having the right technology to address growing demands from the business.
– Revenue teams lack confidence in their data: Only 44% of respondents say they are highly confident in their revenue data. Bad data hygiene in upstream processes (39%) is highlighted as the top challenge revenue teams face.
– Revenue accountants crave more automation: 79% of revenue accounting leaders agree there’s a need for higher levels of automation. – – — Revenue accounting leaders also estimate their team wastes more than half (53%) of their time doing manual repetitive tasks, with 60% feeling that their Enterprise Resource Planning (ERP) revenue recognition modules do not fully support business requirements, even with customization.
– But executives need more education on revenue automation: 67% of respondents say it’s a struggle to get buy-in from finance and accounting leadership to implement revenue automation.
“With more pressure than ever to innovate, companies are increasingly introducing complex revenue streams that leave revenue accounting teams struggling to support these business requirements,” said Emily Daigle, Vice President and General Manager of Zuora Revenue. “Zuora’s State of Revenue Accounting report shows the opportunities for teams to automate mundane tasks, reduce risk and unlock resources. Better collaboration across accounting, finance and business leadership will help companies strategically address market demand and become more customer-centric.”
Zuora commissioned an independent market research firm to survey over 500 accounting and finance leaders at enterprise organizations across North America and Europe to analyze the current state of corporate revenue accounting.
The 2023 State of Revenue Accounting report is available here.