27 May, 2022

NetSuite Contract Renewals

Software companies rely on recurring revenue from licensing and maintaining contracts to stay afloat. Managing and improving these regular streams is essential for success. Many software firms today experience revenue losses and customer attrition as a result of their reliance on inefficient, slow-moving systems. Contract renewals are managed via manual processes and keep track of recurrent revenue. 

Key Capabilities  

Renewal Automation

Software enterprises that offer perpetually licensed and term-licensed items can use NetSuite's versatile and robust automated renewing method to manage recurring invoicing of both on-premise and on-demand software licenses. NetSuite users can automatically generate renewal transactions based on a pre-defined timeframe, such as 90 or 120 days before the end date. This guarantees that renewals are handled promptly and that revenue possibilities are not overlooked. It also improves workflow and cuts down on time, money, and risk. 

Multiple Contracts Management

One of the numerous issues with renewals is maintaining the numerous transactions that take place with a customer over the span of a year. Combining many transactions into a single deal with a single renewal, NetSuite benefits both the vendor and the client. When it is not practical to co-terminate all things under a single contract, multi-contract support gives additional flexibility. This simplified technique ensures that maximum income is generated during the renewal process. 

Management of uplift and discounts

The contract renewal procedure relies heavily on uplifting and discounting. When a software firm renews a client, it may raise prices based on a predefined price book or a standard across-the-board rise, or it may raise prices only for certain customers or customer groups.

Similarly, the business may provide discounts to a restricted group of clients. 

It is critical for a software company to be able to deploy and adapt uplifts and discounts for a wide range of clients; but, doing so with spreadsheets increases the risk of errors, lost income, and customer unhappiness. NetSuite provides a number of features that let you control uplifts all across the company or per client, as well as detailed discounts down to the process level. 

Recognition of Revenue

Another problem that software companies have is recognizing income from contract renewals. Revenue recognition happens most of the time at the same time as transactions. Revenue recognition may need to be managed independently in some cases, based on types of transactions and the new Financial Accounting Standards Board (FASB). This separation of income recognition frequently necessitates the creation of yet another process, lengthening the time and workload associated with renewal. 

NetSuite addresses this issue by allowing users to manage multiple sets of dates for revenue recognition purposes. This feature enables contract renewal and payment processing to run smoothly, while revenue recognition can be handled in a different way without the need for a new set of spreadsheets or added complexity. 

Transparency and reporting

Monitoring and real-time insight are required to optimize the recurring revenue stream.  Revenue leakage, customer attrition, and failure to capitalize on upsell opportunities with clients renewing multiple products or services at the same time are all too common outcomes. 

Staff can quickly plan and monitor critical deals, the renewal pipeline, upsell prospects, and more using key performance indicators (KPIs) on graphic dashboards. Interactive drill down and reporting allow for a deep study of customer and contract types, as well as flaws that need to be addressed. 

Connect Jobin & Jismi for NetSuite-related queries.