revenue accounting
Revenue accounting is the process of receiving, organizing, and recording payments and billing, recording, tracking, and collecting loans and other types of receivables on customer accounts. Revenue accounting provides essential tools to determine and track revenue generated.
In business, revenue means the income that a business actually receives from its activities, especially from sales of products and/or services to customers. Steady revenue growth is essential for a company to attract investors to its publicly traded stock. However, income is less important than profit for investors. The word “top line” is also used to represent the term “revenue,” because on a company’s profit and loss account, revenue is usually placed at the top and all other costs and expenses below that.
‘Revenue recognition’ is one of the four main principles listed in the US Generally Accepted Accounting Principles (GAAP). The other three include the ‘historical cost principle’, the ‘matching principle’ and the ‘ full disclosure principle.
Data capture, preparation, accounting, auditing, reconciliation, management reporting, and cross-line billing are the main processes involved in revenue accounting. The airline revenue accounting system is a good example. Its goal is to provide scheduled passenger airlines with a computerized solution to serve the needs of passenger revenue accounting departments.
Revenue accounting has now become more complex and auditors are now examining financial records in finer detail. Unfortunately, many accounting systems do not handle complex revenue processes well because they are designed for simple revenue processes. You can automate revenue accounting by using software packages. They help you eat multiple business models, corporate entities, and currencies.
