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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

Order-to-Cash (OTC or O2C)
Order-to-Cash (OTC), also sometimes referred to as Order-to-Cash Cycle (O2C), is a crucial business process encompassing all the activities involved in processing a customer order and collecting payment. It essentially tracks the journey a sale takes, from the initial moment a customer expresses interest to when the company receives the final payment.
Profit and loss (P&L) statement
A P&L, also known as a profit and loss statement or income statement, is a financial document that summarizes a company's revenue and expenses over a specific period, typically a month, quarter, or year. It shows how effectively a business is converting its sales into profits.
Revenue Recognition
Revenue recognition is an accounting principle that governs when and how a company recognizes revenue from its sales transactions.
Stripe NetSuite Integration
Yes, you can integrate Stripe with NetSuite via an app like ZonePayments, which allows you to collect customer payments and reconcile deposits directly within NetSuite while maintaining control and compliance. 
Total Available Liquidity
Total available liquidity includes 100% of the cash and cash equivalents a business has on hand. It may also include a company’s borrowing capacity.
Working Capital Ratio
Working capital ratio (WCR) helps businesses assess their ability to pay current liabilities. More specifically, this liquidity metric determines how many times a company’s current assets can offset these liabilities.