Skip to main content

Advanced Revenue Management (ARM)

What is Advanced Revenue Management (ARM)?

Advanced revenue management (ARM) is a process designed to handle the complexities of revenue recognition in accordance with accounting standards such as ASC 606 and IFRS 15. ARM involves automating and managing multi-element arrangements, subscription billing and revenue allocation. ARM systems ensure that revenue is recognized accurately and timely, reflecting the true financial performance of a business. It's a term also commonly used in the context of NetSuite, a cloud-based Enterprise Resource Planning (ERP) software system.

Implementing ARM solutions can significantly reduce the risk of errors and non-compliance, which are common challenges in manual revenue management processes. These tools provide transparency and detailed reporting, making it easier for finance teams to track revenue streams and make informed decisions. Additionally, ARM systems can adapt to evolving business models and regulatory changes, ensuring that companies remain compliant and efficient in their revenue recognition practices.

Related terms

ASC 606
Accounting Standards Codification (ASC) 606 is a standard framework for revenue recognition developed by the Financial Accounting Standards Board (FASB) for companies operating within the United States.
Account Reconciliation
Account reconciliation is the process of comparing two sets of records to ensure their accuracy and consistency.
Accounts Payable
Accounts payable (AP) refers to the amount of money that a business owes to its suppliers or creditors for goods or services purchased on credit.
Accounts Receivable Aging
Accounts receivable aging is a reporting process that categorizes unpaid invoices and credit memos according to how long they remain outstanding. They are typically sorted into 30-day ranges (0-30 days, 31-60 days, 61-90 days), and this report is how companies calculate their days sales outstanding (DSO) average. 
Accounts Receivable Turnover
The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.
Accrual Accounting
Accrual accounting is an accounting strategy that records payments and expenses when they are earned and incurred. This is different from cash accounting where revenue is recognized when it is actually deposited or transferred.