Revenue Delivery

What is Revenue Delivery?

Revenue delivery refers to how your company turns its revenue-generating activities into actual money in the bank through streamlined and automated financial processes. It’s the combination of tools, processes, and teams that handle customer payments and convert them into business earnings.

It encompasses a company’s methods of…

• gaining new customers
• expanding their accounts
• retaining them over time

…while managing tax, payment, and data protection regulations.

In essence, your revenue delivery infrastructure connects your front-office and back-office data to automate and improve financial processes. Through this, your company can effectively manage cash flow, reduce costs, and increase revenue by streamlining the entire payment process.

Components of a Revenue Delivery Infrastructure

An effective revenue delivery system is one that converts your company’s revenue drivers into tangible revenue efficiently and reports this data accurately.

To accomplish this, you have to attract qualified prospects, quickly move them through the sales funnel, get them to pay on time, retain them long enough for them to be profitable, and comply with finance regulations.

So, your revenue delivery infrastructure contains the following components:

GTM Execution

While it doesn’t explicitly pertain to revenue delivery, the first piece of the puzzle is how you bring your product to market. Your go-to-market strategy — how you identify, target, and acquire potential customers — determines how you’ll execute the remaining steps.

Before you think about the rest of your revenue delivery infrastructure, you have to lay the groundwork. This includes:

• Aligning sales, marketing, and product teams
• Defining your target audience, segmenting it, and devising messaging that resonates with its members
• Reinforcing your value proposition and product differentiation
• Optimizing your communication channels to connect with potential customers

If you can’t bring qualified leads into your pipeline, you won’t be able to sell effectively or collect payment, making it challenging to generate revenue. So, creating a solid GTM strategy is the first half of the battle.

Sales Operations

Sales efficiency is a big deal when it comes to revenue delivery. Once a qualified lead enters your sales pipeline, what does the buying experience look like?

For your revenue delivery infrastructure to work, you have to eliminate unnecessary friction in the sales cycle by:

• Creating sales enablement materials that educate buyers and reduce objections
• Using a consistent sales qualification framework (e.g., MEDDIC) to screen leads accurately
• Creating a sales playbook to guide reps through the selling process
• Automating quote-to-cash and CRM data entry so reps can concentrate on selling

As far as revenue delivery is concerned, the most important element here is an integrated approach. Your CPQ and CRM have to connect with your billing/accounting tools to ensure you’ll actually receive and accurately report on your earnings. As you move through the steps of converting closed deals into operating profit, disparate systems create friction and inconsistency that slows down the delivery process.

Payment Management

Payment management pertains to how you collect, track, and report on your sales revenue. In B2B sales, payment cycles can be long and complex, especially when dealing with large orders or recurring payments.

Your revenue delivery infrastructure should eliminate barriers to payment and make it easy for customers to pay through:

• Offering various payment methods
• Automating invoicing and billing processes (including currency conversion and tax calculations)
• Implementing a subscription management system for recurring revenue streams
• Streamlining the dunning process to reduce Days Sales Outstanding and bad debt expenses
• Integrating with your CRM and accounting systems so financial data is accurate and up-to-date
• Creating security measures for fraud prevention and false payment declines

Involuntary churn — when customers fail to pay or renew their subscriptions because they couldn’t or forgot — is a huge issue for SaaS companies. It makes up anywhere from 20% to 40% of their overall churn, according to data from Gong.

To improve your revenue delivery process, you have to make it easy for customers to pay and keep their payments up-to-date. This means streamlining the payment process, offering flexible payment options, sending automated reminder emails before their payment is due, and automating your billing process to reduce the number of missed/failed payments.

Revenue Recognition

Under ASC 606 (or, for international companies, IFRS 15), businesses recognize revenue in the period they earn it — that is, when they fulfill their contractual obligations to a customer. This revenue recognition principle significantly impacts how businesses approach revenue delivery.

Your revenue delivery infrastructure should make it easy to:

• Track performance obligations (and whether they’re fulfilled)
• Determine transaction prices and allocate them to each obligation
• Recognize revenue accurately  and in a timely manner
• Provide detailed revenue reports for auditing and compliance purposes

The bottom line: You need to have clear processes and systems in place to track, recognize, and report on your revenue accurately. This is essential from an accounting standpoint and allows you to analyze your performance and make data-driven decisions for future growth.

Compliance

Managing revenue delivery means handling all types of compliance. Beyond regulations and contractual obligations specifically tied to your business’s income-generating activities, handling sensitive customer information requires you to comply with data privacy laws.

• Financial compliance — Accurately reporting your sales revenue and adhering to various local regulations, like PSD2 in Europe.
• Tax compliance — Registering and filing taxes everywhere your customers are located.
• Data privacy compliance — Collecting, storing, and protecting personal data in accordance with GDPR and other regulations.
• Internal compliance — Ensuring all employees follow your company’s protocols and your organization fulfills its contractual obligations to customers.

It’s worth mentioning that responsible cash flow management is a huge part of compliance. If your entire revenue generation system runs smoothly but you aren’t setting aside enough for taxes (or aren’t doing it right away), you aren’t successfully delivering revenue.

Customer Success

Receiving the initial revenue from a new customer is really just the beginning. For them to be profitable (i.e., offset your acquisition costs and make you enough money to pay your employees and grow your business), they need to earn you at least 3x what you spent to acquire them.

This is where customer success comes in — it’s the only way you’ll turn closed deals into profitable customers.

Briefly, it encompasses the following revenue activities:

• Revenue retention and expansion — Upselling, cross-selling, upgrading, and renewing subscriptions to increase customer lifetime value.
• Customer satisfaction — Listening to customers, considering their feedback, and responding promptly to solve their problems.
• Churn reduction — Identifying at-risk customers and taking proactive measures to prevent them from leaving.
• Buyer support — Delivering best-in-class onboarding and customer support to ensure product adoption and long-term success with your product.

To maintain customer success, your revenue delivery system should include systems for tracking customer interaction, identifying buying signals, and automating renewal processes (e.g., sending timely reminders for contract renewals).

Reporting and Forecasting

Revenue delivery is closely tied to growth. To understand where you need to improve your revenue delivery process, understand your company’s financial health, and consider its future potential, you need to track, report, and forecast revenue performance. 

Your reporting should include real-time data on the following revenue metrics:

• MRR (monthly recurring revenue)
• ARR (annual recurring revenue)
• Churn rate
• Customer acquisition cost (CAC)
• Customer lifetime value (CLV)

This will let you measure the success of your revenue delivery process, identify trends and potential issues early on, and make data-driven decisions to drive growth.

Revenue Delivery Challenges SaaS Companies Face

Even with the best systems in place, SaaS companies may still face challenges when it comes to revenue delivery. Some of the common issues include:

• Subscription management and billing complexity. Software companies use a combination of tiered, usage-based, and flat-rate subscription models that are challenging to manage (every customer has a unique billing structure). As they expand their customer base and product/service library, their subscription billing processes become difficult to manage.
• Integration issues. If one element of your RevOps tech stack doesn’t integrate with the rest, you’ll have issues with reporting, payment collections, and quote-to-cash efficiency.
• Inaccurate revenue recognition. Subscription businesses often receive upfront payment for a month’s or year’s access to their product. Since this revenue is “earned” over the duration of the subscription (not when they receive payment), reporting on it accurately requires automation.
• Involuntary churn. As mentioned above, SaaS businesses lose a huge chunk of their customers from payment issues they could easily prevent. A recurring billing platform can help them keep track of expiring credit cards and failed payment attempts.
• Revenue leakage. Losing revenues unintentionally due to leaky product catalogs (i.e., customers being given access to features they didn’t pay for) or human error (e.g., a customer service rep giving a refund without adjusting the payment system) is a common issue in SaaS revenue delivery. SaaS businesses lose millions without a way to flag unusual payments/changes and resolve them.

How a Revenue Delivery Strategy Helps

A revenue delivery strategy is a plan of action that addresses all the challenges mentioned above and more. It helps your SaaS business to implement processes, systems, and tools for seamless quote-to-cash management, customer success, reporting, and forecasting.

To design an effective strategy:

Identify Your Revenue Delivery Goals

Consider your business objectives and how revenue delivery plays into them.

Here are a few examples:

• Improving profitability by eliminating points of friction and increasing customer lifetime value
• Automating renewals, upgrades, and upsells to reduce involuntary churn and achieve >100% net revenue retention.
• Creating a customer portal that enables them to update their subscription billing without reaching out to your support team.

Having clear goals in mind will guide your strategy’s direction and help you prioritize activities that most directly and immediately contribute to top-line revenue generation and bottom-line delivery.

Understand Your Customers’ Journey

Map out the customer journey to identify touchpoints and potential roadblocks in the process. This will help you design processes that enhance their experience while also driving revenue.

Audit Your Current Revenue Delivery Processes

Assess your current processes, systems, and tools to identify gaps in automation or integration. This will help you design a more efficient workflow that reduces manual labor and error.

Implement the Right Systems and Tools

Choose RevOps software that integrates with your existing systems and automates tasks associated with revenue generation and management. CRM, CPQ, billing/subscription management, and accounting tools are the first things you should consider.

Beyond that, look for tools that streamline additional processes. Sales enablement platforms, document automation software, and AI-driven revenue intelligence tools are three key examples. 

Train Your Team

Your team needs to understand the importance of revenue delivery and how their roles contribute to it. Train them on using new systems/tools effectively, handling customer interactions, and identifying buying signals/opportunities for expansion.

Benefits of a Revenue Delivery Strategy

Done right, a mapped-out process for turning B2B prospects into customers and keeping them is your best weapon for improving profits, increasing CLV, and creating a scalable subscription business.

A revenue delivery strategy that marries your company’s goals with your prospects’ and customers’ needs can help you:

• Increased efficiency. By automating and streamlining manual tasks, you’ll reduce human error and shorten the time it takes to close deals, manage compliance, and reconcile your books.
• Reduced voluntary and involuntary churn. You’ll dramatically lower your churn rate through billing automation and customer success initiatives.
• Improved customer experience. A seamless revenue delivery process leads to happier customers who are more likely to renew, upgrade, or recommend your product/service.
• Better forecasting. When all the systems tied to revenue share the same data, you’ll always have an up-to-date picture of business status and health. With accurate and real-time reporting within revenue intelligence software, you’ll make data-driven decisions that impact both top-line revenue generation and bottom-line profitability.
• Higher revenues. When you address common challenges in the delivery process and implement a solid revenue management strategy, you’ll see an increase in revenue from both new and existing customers. Plus, you’ll keep more of that revenue thanks to improvements in operational efficiency.

What to Expect From an Effective Revenue Delivery Infrastructure

Aside from the improvements in efficiency, profitability, and customer experience mentioned above, a well-implemented revenue delivery strategy should also lead to:

• Higher sales velocity
• Higher conversion rates
• Scalability (for your company and the processes itself)
• Better sales forecasting
• Improved communication between departments and stakeholders
• Fewer tax liability headaches
• Lower compliance (and non-compliance) costs
• Improved customer satisfaction and retention rates

Remember: Your revenue delivery infrastructure should drive growth, not hinder it.

If you’re having trouble bringing your products to market, integrating your workflows, and understanding your revenue streams, it’s time to look into an all-in-one solution for revenue delivery.

For an enterprise business with intricate needs, the solution might be to hire a dedicated team to build, deploy, and maintain integrations between all your systems. But that assumes you have the budget and willingness to commit to such a long-term project.

What you’re probably looking for isn’t that. More than likely, you need a platform that manages everything from quote-to-cash to ongoing subscription billing.

People Also Ask