Generating profits is a top priority for businesses of all sizes. However, a common issue that businesses face is revenue leakage, which occurs when a business earns revenue but doesn’t collect it. This problem can be caused by a variety of factors, including human error, poor processes, and bad data. In many cases, revenue leakage goes unnoticed, resulting in a significant loss of revenue for the business.
There are several areas where revenue leakage tends to occur, including unenforced contracts, late payments, late invoicing, data entry errors, poor accounting, high discounting, and poor revenue operations. By understanding these areas and implementing effective solutions, businesses can prevent revenue leakage and protect their bottom line.
1. Unenforced contracts
One of the primary causes of revenue leakage is unenforced contracts. This occurs when a customer fails to pay for services that they have received. To prevent this, businesses should ensure that they have clear and concise contracts in place with enforceable terms. These terms should be agreed upon by both parties before any services are provided. Businesses should also have a comprehensive contract management system in place to ensure that contracts are followed and any breaches of the contract are addressed. Salesforce CPQ offers a contract management solution that can help businesses manage their contracts and ensure compliance with the agreed-upon terms.
2. Late payments
This can be prevented by setting up a streamlined invoicing and payment collection process. This process should include sending out invoices promptly and consistently, following up with customers who have not paid, and providing convenient payment options. It may also be helpful to incentivise customers to pay on time. Accounting Seed provides a robust invoicing and payment collection system that integrates seamlessly with Salesforce, making it easier for businesses to manage their invoicing and payment processes (read our case study of how we improved efficiency by almost 30% with seamless integration).
3. Late invoicing
To prevent this, businesses should implement a system to ensure that all invoices are sent out promptly and accurately. This system should include a process for tracking invoices and following up with customers who have not paid. Additionally, businesses can set up automated invoicing and payment collection systems to streamline the process. Accounting Seed offers an automated invoicing solution that integrates with Salesforce, allowing businesses to easily manage their invoicing and payment collection processes.
4. Data entry errors
These errors can occur when data is entered manually into systems or when there are inconsistencies between different systems. To prevent this, businesses should have strict quality control measures in place, including a system of checks and balances to ensure that all data is accurate and consistent across different systems. Additionally, businesses can implement an automated data entry system to reduce the risk of human error. Salesforce offers a data entry solution that can help businesses automate their data entry processes and reduce the risk of errors (read our case study of how we integrated Salesforce-ChatGPT to transfer email inquiries into Salesforce leads).
5. Poor accounting
FTX, which was the leading cryptocurrency exchange and was once valued at $32 Billion collapsed because of substandard accounting practices. This Poor accounting occurs when the accounting team fails to keep accurate records of financial transactions, which can result in lost revenue. To prevent this, businesses should have an experienced and skilled accounting team in place. This team should have a comprehensive understanding of the business’s financial processes and be able to identify areas where revenue leakage is occurring. Accounting Seed offers a comprehensive accounting solution that integrates with Salesforce, allowing businesses to manage their financial processes efficiently.
6. High discounting
While it may be necessary to offer discounts to customers to incentivise them to buy, excessive discounting can eat away at profits. To prevent this, businesses should have a clear pricing strategy in place based on the value of their products or services. By understanding their value proposition, businesses can charge a fair price that customers are willing to pay, without sacrificing profits. Additionally, businesses can train their sales team to sell based on value rather than price, to reduce the need for excessive discounting
7. Poor revenue operations
When different departments in the business are not communicating effectively, it results in lost revenue opportunities. To prevent this, businesses should have clear communication channels in place, including a system for different departments to communicate effectively. Additionally, businesses can ensure that everyone is working towards the same revenue goals, and they are not missing out on any revenue opportunities. This can be achieved by having cross-functional teams to promote collaboration, ensuring that everyone is aware of their responsibilities, and regular communication with all departments. Salesforce offers a revenue operations solution that can help businesses manage their revenue operations more efficiently.
In conclusion, revenue leakage can cause significant damage to a business’s bottom line. However, by understanding the causes of revenue leakage and implementing effective solutions, businesses can protect their profits and promote growth. At Brysa, we specialise in helping businesses optimise their revenue streams. As a Salesforce and Accounting Seed partner based in London, UK, we have extensive experience in revenue management and can help businesses implement the right processes and procedures to prevent revenue leakage from happening. Our team of experts can provide valuable insights and recommendations to streamline processes and ensure businesses are collecting all the revenue they are owed.
In addition to revenue management services, Brysa offers a range of services that help businesses maximise their Salesforce investment. We provide tailored Salesforce solutions, including consulting, development, integration, and ongoing support, to help businesses achieve their goals. Our team of certified Salesforce professionals works closely with businesses to understand their unique requirements and develop customised solutions that meet their needs.
If you’re concerned about revenue leakage and want to ensure that your business is running at peak efficiency, contact Brysa today. We’re here to help you achieve your revenue goals and take your business to the next level.
