Report: CFOs Eyeing New Revenue Management Tech, Practices | Accounting Technology

CFO.as_.Risk_.ManagerChief financial officers and senior management teams are reassessing their revenue management practices and technology, according to The New World of Revenue Management report released by the Institute of Management Accountants and FinancialForce, cloud ERP provider on the Salesforce App Cloud. According to the report, these reevaluations are in response to both the new revenue recognition accounting standards issued by the Financial Accounting Standards Board and the International Accounting Standards Board and a new category of usage-based business models that can positively influence a business’s valuation. These models include software subscriptions, recurring billing, professional services and product/service billing. Of the 235 survey respondents, IMA members that work as a CFO, controller, director or accounting manager, 30 percent recognize the new revenue recognition standards will impact their company somewhat or a great deal, and specifically, 55 percent said the new standards would impact their revenue processes and financial statements. Meanwhile, half of the respondents said their firms fall under GAAP revenue recognition guidelines, and of those who do not, two-thirds have not yet assessed the new standards. Spreadsheets are still the most commonly used method to track revenue recognition (for 60 percent of respondents), with ERP applications second at 46 percent. One-fourth of respondents have either weak or no controls over their existing revenue recognition systems, while 30 percent of the respondents plan to reassess their systems and controls because of the new requirements. Another 48 percent said “maybe” or “not sure” to reassessment. “We are in the midst of the as-a-service economy boom, which is making recurring revenue the central model of new and traditional businesses,” stated Raphael Bres, general manager for financial management applications at FinancialForce. “CFOs and senior management teams are at a crossroads and must address these major shifts or risk being non-compliant, inefficient, and worse yet, lose market share for failing to give customers the new billing models they want. As this survey underlines with the upcoming new revenue recognition rules, it is time to adopt a strong revenue management application, with customer retention in mind, helping companies to gain a reliable and predictable revenue stream, superior customer and revenue forecasting analytics, as well as automating complex accounting requirements.”  The full report is available for download here.

Source: Report: CFOs Eyeing New Revenue Management Tech, Practices | Accounting Technology

PWSA’s new leader is scolded over billing problems | Pittsburgh Post-Gazette

Four Pittsburgh City Council members scolded the Pittsburgh Water and Sewer Authority on Monday for ongoing customer service and billing issues — including in some cases thousands of dollars in incorrect charges and bills that fail to arrive — that have outraged constituents and monopolized their staffs’ time. Natalia Rudiak noted that her office still receives two to six PWSA-related complaints weekly, sometimes requiring several hours of attention. “It’s an inappropriate use of city taxpayer dollars to help navigate something that is an independent entity and not our responsibility,” she said. “We are simply relaying the anger that our constituency is relaying to us.” Interim Executive Director David Donahoe said a rushed “marriage” of a new billing system and new meter-interface units that use wireless technology to relay usage information caused incorrect billing, overwhelming customer service staff. PWSA’s board promised resources to right the issues, he said, adding that he has told employees that customers must be treated fairly. Its 111,000 customers receive water and sewer services, sewage removal or are municipal entities. “In short, we have, in all three cases, established the right people as far as I can tell, working on the right solutions. The PWSA does not want our customers to spend time on these issues. … So our goal is to get this marriage working as soon as we can possibly do that,”said Mr. Donahoe. He was named interim executive director March 3 after Jim Good abruptly resigned. Paul Leger, city Finance Department director and PWSA treasurer, said incorrect residential bills have decreased from 50 percent to about 3 percent, just above the industry standard of 2 percent. Councilwoman Deb Gross, who also sits on the PWSA board, said of the ongoing issues and 50,000 incorrect bills: “City council was not crazy. Our constituency was not crazy. There was a systematic problem, and that’s something we can take away from today: affirmation, and that you are working on it.”

Source: PWSA’s new leader is scolded over billing problems | Pittsburgh Post-Gazette

Kirkwood sewer bills bump up after MSD error | St. Louis Public Radio

Some Kirkwood residents are getting a shock when they open their sewer bills this month. The Metropolitan St. Louis Sewer District is charging a one-time fee to correct a billing error, jacking up bills several hundred dollars in some cases. Shonda Scott’s bill jumped up more than $400. “I was given a little notice from our neighbors,” said Scott, whose neighbors saw increases of $100- $200. “My blood pressure didn’t shoot up as high as it could have possibly been.” According to MSD spokesperson Lance LeComb, Scott and her neighbors are outliers, with the average customer owing the utility $6.50. “We’re certainly always very flexible in setting payment plans and we will work with those folks,” said LeComb. “But the bottom line is we did make a mistake, but we are billing for services that were rendered and delivered.” LeComb said letters warning customers of the fee were sent out last week to 6,500 Kirkwood residents and 800 businesses. For the past eight months those customers were under-billed due to a conversion error introduced by MSD when the city of Kirkwood put in new water meters. The meters measure water usage in gallons, while MSD measures water usage in one hundred cubic feet. Because MSD bills are based on water usage, Scott said she is confused that her bill is so much higher than her neighbors. “Our kids are moving out, we’re kind of empty nesting. And we don’t have a pool, we don’t have an irrigation system,” said Scott. “So I was surprised that ours is $400 higher compared to the $100 and $200 higher that our neighbors are experiencing.”

Source: Kirkwood sewer bills bump up after MSD error | St. Louis Public Radio

ERP (Enterprise Resource Planning) Shortcomings

logoERP (Enterprise Resource Planning) shortcomings

ERP systems allow the enterprise to automate and control each process. However, enterprise wide value chains span multiple processes and even systems. They also interact with people. Therefore, an ERP system

 

CANNOT:

  • Control itself, knowing when it is failing or making mistakes.
  • Oversee more than one process at a time (there are attempts to create cross reference checks by some ERP providers, that provide very limited capabilities)
  • Start the process from the middle, all workflow must have a beginning point.

Capability to “follow the money” in real time

An enterprise comprises of multiple locations, systems, processes and people. If one of these entities starts an enterprise wide value chain, like “order to cash”, it may touch several locations and multiple systems etc. It is impossible to follow each deal, from the beginning to the end, in real time. Therefore, enterprise CANNOT:

  • Identify an issue before it has been covered up by an insider or a cyber attacker.
  • Stop a major system error before a negative effect on a large number of customers.
  • Prevent “fat fingering” catastrophic errors.
  • Stop insider fraud and cyber attacks.

 

SOLUTION

We offer a new technology, based on a real time watchdog engine. It is capable of following the data across multiple locations, systems, processes and users. Therefore we CAN:

  • Prevent money from leaking out of customer, supplier and payroll related value chains.
  • Identify data issues that were caused by user error, system error, insider fraud or cyber attacker.
  • Notify the appropriate business contact, in real time, in order to prevent any damages.

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Illinois AG warns consumers about smart meter plans | abc7chicago.com

CHICAGO (WLS) — There’s a new warning from the Illinois attorney general concerning the new smart meters, and people who may use the technology to take advantage of you. If you don’t have one already you will soon; ComEd says it has installed about 2 million smart meters. But the I-Team found that some businesses could use the new meters to sell you a questionable plan. It’s out with old analog meters and in with new digital ones. You can use them to save money by tracking your real time electricity use. But with the technology, comes a warning. “So there is a lot of potential for consumers to be deceived and ultimately spend more money,” Illinois Attorney General Lisa Madigan said. Madigan says unregulated, alternative energy suppliers will soon be asking for authorization to to read smart meters, so they can sell customized electric plans based on user habits. Some of those plans could save you money but it also opens the door for potential bad deals. “They may come to your home, they may call you on the phone, maybe they will send you something in the mail asking you to sign that authorization,” Madigan said.

Source: Illinois AG warns consumers about smart meter plans | abc7chicago.com

Business owner with smart meter receives $13,000+ Consumers Energy bill | Fox17

GRANDVILLE, Mich. —  A Grandville business owner’s massive Consumers Energy bill was dropped after he mentioned that he called the FOX 17 Problem Solvers and complained to the state. Ronald Hite runs C&R Mobile Wash, a power washing business in Grandville.   He’s only had the business for a month, and says he risked it all to start it. “All my savings…and I actually had an aunt help with all the investments,” he said. Hite said a bill like the one he received from Consumers would have basically ruined his new business. “I went to the owner that owns this building and showed him the bill.  And they have six of these buildings and they have never seen a bill get this high,” he said.  “Like the highest bill $200, $250 a month depending on how much they use on electricity.” His bill for a 29 day billing period was $13,628.79.   He called Consumers Energy, believing it was all just a big mistake. He says he was told the smart meters don’t lie. Consumers has told FOX 17 on numerous occasions that the estimated high bills from old analog meters would be solved by the installation of smart meters, but Hite had a smart meter, and this is the largest bill FOX 17 has seen from a viewer. Consumers Energy had a change of heart when Hite mentioned the Problem Solvers. “Within 24 hours I got a call saying it was a clerical error,” Hite said. Hite’s bill was dropped to about $39.

Source: Business owner with smart meter receives $13,000+ Consumers Energy bill | Fox17

3 Things American Water Works’ Management Wants You to Know — The Motley Fool

When a company reports its quarterly earnings, management often presents just a sketch of how the company performed. But equally important for investors is the conference call — where management’s commentary colors in the sketch, providing the full picture of the company’s recent performance. Let’s look at some of management’s more notable comments from American Water Works’ (NYSE:AWK) most recent call to help discern the full picture for Q4 2015.  Staying on target Operating as efficiently as possible is the hope of any good company, but it’s especially important for a company like American Water Works — a company that can’t merely raise rates when it desires. Instead, the company must seek regulatory approval for rate increases; consequently, streamlining its operations is crucial — squeezing out every bit of value that it can from the top line. Management gauges success in this through the O&M efficiency ratio metric — a measure of its operations and maintenance expense in its regulated business segment against its regulated business revenue. The company has consistently been improving on this metric since 2010. Reporting an O&M efficiency ratio of 44.2% in 2010, the company improved that figure to 35.9% for 2015. Management is quite proud of its accomplishment and affirmed its forecast that it will achieve its 34% target by 2020. During the conference call, the company’s COO, Walter Lynch, stated, “I know, we’ve talked a lot about this, most recently, at our Investor Day in December, but I think it’s worth repeating: We’ve really made tremendous progress here.” And though management didn’t state it specifically, the improved O&M efficiency has surely contributed to the company’s earnings growth; management reported diluted EPS of $2.64 for FY 2015, a gain of more than 10% over the $2.39 it reported in FY 2014. Metering for cautious optimism Although management is reluctant to comment on its O&M efficiency ratio expectations post-2020, it’s reasonable to suspect that it has high ambitions. During the question-and-answer session of the call, Richard Verdi, an analyst from Landenburg Thalmann, noted that American Water, a few years ago, had a target of 35% for 2018 — 100 basis points higher than the 34% target for 2020 — and probed to see how likely it was that American Water reduces the ratio to around 33% by 2022. He further pointed to automation and technology as a force behind the reduction.  Walter Lynch didn’t take the bait, but his reply was telling nonetheless: “We’re not going to forecast beyond 2020 and 34%, but I can tell you our teams are geared toward continuous improvement, and that’s what’s driving this, and technology is going to be a big part of it.” Further elaborating on this point, Lynch credited the company’s 90% implementation of automatic meter reading and its transition to advanced metering infrastructure as driving factors. These moves, as well as others — such as the recently announced collaboration with General Electric to explore the Industrial Internet of Things applications for the water industry — suggest that the 34% target may soon fall victim to a more aggressive target, which, should it happen, would also suggest a more robust EPS forecast revision.

Source: 3 Things American Water Works’ Management Wants You to Know — The Motley Fool