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Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
Revenue Reconciliation System
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Revenue Reconciliation System

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A Revenue Reconciliation and Settlement System that was built to provide an automated and systemic approach to recognizing revenues across the various revenue streams of the organization.

A Revenue Reconciliation and Settlement System that was built to provide an automated and systemic approach to recognizing revenues across the various revenue streams of the organization.

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  • 1. Revenue Reconciliation and Settlement Systems Mahesh Patwardhan Digital and New Media Consultant
  • 2. Contents 1. Introduction and Overview 2. Ad Sales Contract and Credit Approval System 3. Web Services for Upstream Data 4. Revenue Reconciliation for Ad Sales 5. Revenue Reconciliation for Mobile Services 6. Revenue Reconciliation for eCommerce and Subscription Services 7. Common Accounts Manager 8. Interface to GL Accounting System 9. Conclusion
  • 3. Objective  The Revenue Reconciliation and Settlement Platform provides ◦ a process and a system for Revenue Reconciliation, Recognition and Settlement across the various revenue streams of the organization. ◦ Audit and SOX guidelines mandate that there needs to be sufficient internal control on all financial reporting ◦ Company management and independent audit teams need to attest to this disclosure.  As the company is a listed company, in keeping with the guidelines, there was a need to replace all the manual processes and systems with automated processes and systems that provided sufficient internal control on all financial reporting of the company.
  • 4. Need for a system  Legacy system manual with the following shortcomings  Inputs for accounting and revenue recognition were not automated  Inputs from reports were created manually or generated by systems ◦ SMS – worksheets prepared from logs ◦ AdServer Reports passed on to Accounts ◦ Multiple sources for same service ◦ MIS, Cubot, Logs for SMS services ◦ OTS, MIS for E-Commerce, Subs ◦ Invoicing, Payments process was manual ◦ Different revenue source systems (RSS) ◦ Ad Sales , eCommerce, Subscription, Mobile Services ◦ Each Revenue Soure System is separately located and have little integration between them ◦ Each Revenue Source System involved separate entities for which accounting was done independently.These were:  Partners with whom business is conducted  Payments to Partners, Bills for the same  Collections from Partners, Invoices for the same  Reversals and Chargebacks
  • 5. Sub-systems
  • 6. Sub-systems  Web Services that provide ◦ Contract information from the Contract and Credit Approval System ◦ Delivery Reports from the Campaign Delivery System ◦ Order Revenue and Delivery information from the ecommerce, esubscription and Mobile revenue streams  The revenue reconciliation modules for the revenue streams  The common accounts manager for invoicing and payment settlements  The integration with the GL Accounting system
  • 7. THE AD SALES CONTRACT AND CREDIT APPROVAL SYSTEM
  • 8. Introduction  The Ad Sales Contract and Credit Approval System was built to replace the existing process that was manual  Contracts handed over by the Sales Executives to Finance for booking.  No control provided for the discounts being offered to the clients or the credit offered to the clients or agencies.  The objective of the new system was to provide a workflow system to ensure proper approvals are obtained for order values, the committed deliveries and the credit offered to agencies and clients.  This direction led to the implementation of an Ad Sales Contract and Credit Approval System  System designed to have proper access controls and audit trails to approve discounts and credit  Properly manage contracts and schedule campaigns as per the contracts that were approved and booked.
  • 9. The Workflow
  • 10. The Workflow  The input to the system is the contract details which are input by the Sales Person.  The business rules are then applied on the contract and it is routed to the necessary approving authorities for approval.  Once the contract has been approved, it is then routed to the Finance Department for final verification  Booked as a confirmed order.  Routed to the Campaign manager for scheduling and delivering the campaign as per the approved contract.
  • 11. Business Rules  Business rules are at the core of the system.  Rules as defined by the business that determine the workflow for the contract and credit approvals.  Rules cover agencies, networks and direct clients and events and include the type of campaigns that need to be delivered.  Rules involve internal sales people, finance and campaign management group and approving authorities  Rules are based on the credit-scores of the agencies/clients and the discount limits applicable under various scenarios.
  • 12. Features  Contract Details Management  Inventory CPM Sheet Management  Property Code Management  Approval/Rejection of Requisition  Orders/Contracts  Auto-delegation  Contract Verification by Accounts  Master Data Maintenance  Access Control  View Comments / Audit Trail
  • 13. User Roles  Defined User Roles in the system that accords privileges to the users.  Roles play a part in the business rules that decides the workflow for the approval cycle.  Roles and the privileges as accorded in the system ◦ CFO: Can approve as per the rules ◦ CMRO: Approve as per the rules, Master Data Maintenance ◦ VP Sales: Approve as per the rules, Master Data Maintenance ◦ Sales Mgr: Approve as per the rules ◦ Sales Exec: Enter new contracts, agencies, clients ◦ Accounts Mgr:View Contract details (verification), book contracts, Master Data management ◦ Administrator: User Accounts Maintenance
  • 14. Audit Trails  The System maintains an audit trail for all user activity on the system.  This is a requirement for audit.  The audit trail is maintained for ◦ User comments ◦ User actions ◦ Inventory Units Maintenance ◦ Property Units Mmaintenance ◦ Master Data Maintenance
  • 15. WEB SERVICES FOR UPSTREAM DATA
  • 16. Data Sources  For input of all contract details and the delivery reports into the ART systems, web services were developed to provide the interfaces to allow the data interchange between the various subsystems.  These services were developed and provide either APIs or XML feeds for the data interchange. ◦ Contract information from the Contract and Credit Approval System ◦ Delivery Reports from the Campaign Delivery System ◦ Order Revenue and Delivery information from the ecommerce, esubscription and Mobile revenue stream ◦ Partner Statements from Vendors/Logistics Partners, Payment Gateways, Banks
  • 17. …Data Sources  Contract information from the Contract and Credit Approval System ◦ This provides all the contract information like the total contract value, the campaign deliverables, the start and end date of the campaigns, the billing terms, etc.  Delivery Reports from the Campaign Delivery System ◦ This provides the daily delivery reports which give information on every campaign that is delivered through all of the Ad Delivery Servers which include the impression based Banner Ads Display campaigns, the click based campaigns, and the newsletter based campaigns  Order Revenue and Delivery information from the ecommerce, esubscription and Mobile revenue streams ◦ This provides the order details of the orders received on the ecommerce and subscription systems, the sms deliveries and product downloads from the mobile services, the order deliveries and the payment details from the payment gateway and the banks, etc.  Partner Statements from Vendors/Logistics Partners, Payment Gateways, Banks ◦ This provides the statement details from the various business partners like Vendors, Logistics Partners, Payment Gateways and the Banks. The daily and monthly statements provided by these partners can be reconciled with the statements generated by the system.
  • 18. Web Services  The data received from these web services is used to reconcile the revenues accrued and used in the revenue reporting, recognition and settlement processes
  • 19. REVENUE RECONCILIATION FOR AD SALES
  • 20. Revenue Reconciliation - Ad Sales
  • 21. Inputs to ART-AdSales  The inputs to the Revenue Ad Sales System (ART-AdSales) are the following: ◦ Contract Data from the Ad Sales Contract and Credit Approval System (ACA)  This will give details on the total value of the contract, the committed deliveries, the rates at which the campaigns have to be billed, the start and end dates of the campaigns along with the details of the campaigns. This input data is used as the reference while reconciling against the actual deliveries and the revenue accrued from the campaigns ◦ Delivery reports from the OpenAd Ad Servers, Pay4Clicks Ad Server and the Newsletters System  This provides the actual deliveries that have taken place for the various campaigns that have been configured in the different Ad Servers. ◦ Based on the deliveries and the business rules for recognizing the revenue, the accrued revenue is calculated and the revenue is recognized as per the business rules.
  • 22. Processing and Business Rules  Based on the inputs from the ACA and the delivery reports the ART Ad Sales system will generate the revenue accrual report for the day.  All campaigns that are due for invoicing as per the business rules will be processed and a billing advice will be generated and the revenue for that campaign will be recognized.  Some of the business rules that will trigger the generation of a billing advice in the system are: ◦ End date of campaign reached ◦ Scheduled deliveries completed ◦ Quarter-end ◦ Month-end ◦ Year-end  The billing advices will be generated based on the business rules that are built into the system
  • 23. Output from the System  Billing Advice ◦ The billing advice will be input to the Common Accounts Manger which will in turn generate the invoice for the client.  Payment Advice ◦ The payment advice is the advice which gives the payment to be made to the partner which is the revenue to be shared with the partner channels for displaying banners on their sites across various channels. The revenue share is part of the contract with the partners.  Revenue Accrual Reports ◦ This gives a daily report for the revenue accrued for the time period selected across the various properties and campaign types for the campaigns delivered during the given period.  Partner Channel Revenue Reports ◦ This gives a report on the payments to be made to the partners for the selected time period based on the revenue sharing agreement and the clicks delivered on the partner sites across various channels.
  • 24. REVENUE RECONCILIATION FOR MOBILE SERVICES
  • 25. Revenue Reconciliation - Mobile Services
  • 26. Input to the System  The inputs to the Revenue Mobile Services (ART-Mobile) are the following:  SMS deliveries from the application logs ◦ This will give details on the total number of SMS’s delivered for various operator circles and keywords.  Product downloads from the application logs ◦ This will give details of the total number of products of the different vendors that are downloaded by the users.  The master rates for keywords and product downloads. ◦ This provides the rates that have to be used to calculate the amounts to be invoiced to the various operators across the different operator circles and the payments to be made to the vendors for the product downloads.
  • 27. Processing and Business Rules  Based on the inputs from the delivery logs for SMSs and the master rates in the system, the ART Mobile system will generate a statement for each Operator in each Circle.  Based on the inputs from the delivery logs for product downloads and the master rates in the system, the ART Mobile system will generate a statement for each Vendor of the products.  The Operator/Circle statements are made available to each Operator in each circle who will then input his statement based on the records maintained at each operator in each circle.  The statements are reconciled and settled after being agreed to by all the parties as required by the business rules built into the system.  The Vendor statements are made available to each Vendor who will then input his statement based on the records maintained with him.  The statements are reconciled and settled after being agreed to by all the parties as required by the business rules built into the system.  Once the Operator and the Vendor statements are reconciled, the invoicing and the payment advices are generated and sent to the Operators and the Vendors.
  • 28. Output from the System  The outputs from the system are the following:  SMS counts statements ◦ This is a statement giving the counts of the SMSs sent for various operators across various circles for different services using various keywords.  Vendor product download counts statements ◦ This is a statement for the various product downloads for the various services and keywords for each vendor that has products available for download.  Billing Advice by Operator by Circle ◦ The billing advice is the advice which gives the amount to be invoiced for each Operator across each circle for the SMSs that have been sent by users across various services using various keywords. This is the amount that is payable by the Operator after reconciliation of the counts as per the business rules in the system.  Payment Advice to Vendors ◦ The payment advice is the advice which gives the payment to be made to the vendor for the products that have been downloaded for that vendor the counts for which have been reconciled as per the business rules.
  • 29. REVENUE RECONCILIATION FOR ECOMMERCE AND SUBSCRIPTION SERVICES
  • 30. Revenue Reconciliation for Ecommerce and Subscription Services
  • 31. Inputs to the system  The inputs to the Revenue Ecommerce and Subscription Services (ART-EComm) are the following:  Order details from the Order Tracking System (OTS) ◦ This will give details of the total number of orders and the order value received for various product categories and vendors.  Payment Details from the Banks ◦ This will give details of the daily/monthly payments made into the bank accounts for the products sold.  Vendor payable statements ◦ This provides the amounts payable to each vendor for the products sold on the site. This is the statement which will be reconciled with the statement generated by the system.  Logistics Partner Statements ◦ This provides the amounts payable to each Logistics partner for the products sold on the site. This is the statement which will be reconciled with the statement generated by the system
  • 32. Processing and Business Rules  Based on the inputs from the OTS the revenue accrued for the day will be generated by the system.  This will be reconciled with the collections at the payment gateway and the banks.  The vendor payable statements will be reconciled with the statement generated by the system and the input from the vendor.  The logistics payable statements are reconciled with the statement generated by the systems and the inputs from the logistics partners.  The various statements are reconciled and settled after being agreed to by all the parties as required by the business rules built into the system.  Once the Vendor and Logistics statements are reconciled, the partner payment advices are generated and the payments made to the partners.
  • 33. Output from the system  The outputs from the system are the following:  Vendor Payable Statement ◦ This is a statement giving the amounts payable to the various vendors for the products/services sold on the site.  Logistics Payable Statement ◦ This is a statement for the amounts payable to the various logistics partners for the products delivered to the customers.  Payment Advice by Vendor/Logistics Partner ◦ The payment advice is the advice which gives the amount to be paid to each vendor/logistics partner for the products sold and delivered. This is the amount that is payable to the partners after reconciliation of the amounts as per the business rules in the system.  Bank Reconciliation Report ◦ The bank reconciliation report gives the payments received by the bank as reconciled with the orders received on the site.
  • 34. COMMON ACCOUNTS MANAGER
  • 35. Common Accounts Manager
  • 36. Features  The Common Accounts Manager is the single point of integration with the GL Accounting package.  It maintains a separate set of A/C Heads, for each instance of the business partners mapped from each Revenue Sub-System.  The Journal Vouchers are generated and maintained in CAM.  The invoices are raised based on the billing advices received from the various ART systems and entry of payments made against payment-advices will be performed in the CAM application.
  • 37. Inputs to the system  Billing Advices from ART Ad Sales ◦ The CAM system will receive Billing Advices for each client based on the business rules and generated by the ART Ad Sales systems and store them for processing and generating invoices for the agencies and clients.  Payment Advices from ART Ad Sales ◦ The CAM system will receive Payment Advices for each Partner generated by the ART Ad sales system and store them in the CAM system for processing payment to the Partners.  Billing Advices from ART Mobile ◦ The CAM system will receive Billing Advices for each Operator Circle generated by the ART Mobile system and store them for processing and generating invoices for each Operator Circle.  Payment Advices from ART Mobile ◦ The CAM system will receive Payment Advices for each Vendor generated by the ART Mobile system and store them for processing the payment to the Vendors.  Payment Advices from ART Ecommerce ◦ The CAM system will receive Payment Advices for each Vendor and Logistics Partner generated by the ART ECommerce system and store them for processing the payment to the Vendors and Logistics Partners.
  • 38. Processing  Generate Invoices / Payments for Operators,Vendors, Couriers, Customers. Done based on the advices received from the various ART modules and the invoices or the payments to be made will be processed accordingly.  Receive Collections against Invoices.  Payments against Bills. Track payments made to the Vendors and Logistics Partners for various services.  Track all Outstanding Payables and Receivables from the various operators, clients, agencies and track all payments to be made to Vendors, Logistics Partners and Partner Channels.
  • 39. …Processing  Generate Reconciliation Reports.Various reconciliation reports for payments and receivables will be generated by the system.  Generate Accounting Vouchers. The system will generate journal vouchers for all transactions.  The system will provide a complete audit trail and record all transactions that have taken place. This being an audit requirement all user activity on the system is also tracked.  Integration with the General Ledger Accounting System. The Journal Vouchers summaries are exported at predefined intervals in an automated manner.
  • 40. Output from the system  Invoices ◦ The invoices are generated as per the billing advices received from the ART systems. These are processed and are available in the system as soon as the advices are received and can be generated for presentation to the clients whenever required.  Accounts Receivables Reports ◦ These are reports that can be generated for the amounts that are receivable against the invoices that have been raised for various clients.  Payment Collections Reports ◦ These reports are for the payments that have been collected against the various invoices that have been raised.  JV Summaries ◦ The JV summaries are generated for export to the GL Accounting system.
  • 41. INTERFACE TO GL ACCOUNTING SYSTEM
  • 42. Interface description  A Journal is a log which records all accounting events (financial transactions) for a given business / businesses.  Each entry that is made into a Journal is called a Balanced Journal Voucher and consists of credit and debit sub-entries, against different relevant accounting heads, such that the total credit sub-entries and debit sub-entries are equal (balanced).  The CAM system maintains such a Journal across revenue sub-systems.  The summaries of these JVs are then exported to the GL Accounting System.  During the course of the CAM workflows, which take the Billing and Payment Advices through their lifecycles, per-transaction balanced Journal Vouchers are generated and maintained in CAM, against the appropriate CAM A/C Heads.
  • 43. Input to the system  The 4 JV generating events recognized by CAM are as follows: ◦ Creation of a new PAYMENT ADVICE ◦ Payment made against a PAYMENTADVICE ◦ Raising INVOICE against BILLING ADVICE ◦ Entry of Collection against raised INVOICE
  • 44. Processing  Once the JVs are generated in the system, they are processed and summarized for export to the GL Accouting.  The GL Accounting system offers a mechanism by which the summaries can be exported into the system.  The summaries are converted into the required file formats and the batch processes are scheduled for the transfer of the JVs into the GL System.
  • 45. Output from the system  The outputs from the system are the JV summaries in the required file formats.
  • 46. Conclusion  The document described the Revenue Reconciliation and Settlement System that was built to provide an automated and systemic approach to recognizing revenues across the various revenue streams of the organization.  The audit and SOX requirements made it necessary to have a system replace the existing manual processes.  The inputs to the system are the various business data like contract details, delivery details, order details, partner statements, catalog rates. The processes are driven by a set of business rules that are built into the system.  The processing involves the reconciliation of the various deliveries/orders against the payments received and payable to the partners and the generation of billing and payment advices, and the invoicing and the payments processing for the various business partners.  The JVs that are generated in the system are summarized and exported to the GL Accounting system.
  • 47. Revenue Reconciliation and Settlement Systems Mahesh Patwardhan Digital and New Media Consultant

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