Revenue leakage is a technical phrase used to explain the profit due to the businesses they missed collecting from their customers. For example, they might have under-billed a customer or missed billing them for the services they’ve used or products they’ve received. According to MGI Research LLC, about 42% of companies encounter revenue leakage to a certain extent.
42% appear like a small number of businesses failing to take advantage of their revenue. But what is their actual revenue that is leaking out? Despite various statistics, a generic estimate would come around 2 to 5% of the total revenue. So, most of the businesses will accept the evaluation, and they make allowance also. But if your business turnover is $1M per year, can you afford to drop $50,000? Hence, let’s chart out how you can prevent revenue leakage in this article.
Causes of revenue leakage
In the race of acquiring more customers, businesses always introduce new plans and offer as per the customers’ changing needs. So, the billing models will also change and become more complex. Billing would be simple if you are selling individual products through direct transactions or simple subscriptions. However, if you introduce unique plans with usage-based billing, things become more challenging to track your customers’ activities.
The usage of outdated systems or using manual spreadsheet-based billing increases the probability of challenges aggressively. And these obsolete systems cannot deal with the complexities of current customer-focused billing methods. It might get strung up while tracking the customers and adjusting their invoices to a particular set of circumstances. Also, it is unachievable for legacy systems to keep the catalogues up to date with the current prices.
Result? Loss of revenue with customers and opportunities.
Ways to elude revenue leakage
Growing companies can take the benefits of using intelligent billing platforms like Adptx Suite. It helps businesses to maximize their potential through competent, precise, and leak-proof usage-based billing.
Here are the ways how to achieve revenue monetization:
1. Usage-based models
Adptx Suite is an intelligent billing platform that beats the competition with ingenious product plans and accurate order to cash cycle. It converts the customer usage data into prices and creates the invoices accordingly. Based on the requirements of products or services, the businesses can get various billing models.
2. Flexible product catalogue
Legacy or manual systems require technical experts’ guidance in updating pricing models or product catalogues. But Adptx™ Suite comes with a flexible catalogue for products and services. It supports your business growth by supporting your billing models as they progress.
3. Real-time analytics and reporting
Legacy models lack transparency and limited access to behind-the-scenes activities leading to the causes of revenue leakage. The finance and customer service team would have to spend hours to find the reasons for the profit loss. However, integrating the intelligent billing platform like Adptx™ Suite can provide a clear vision for analytics and generate reports in real-time.
With a better understanding of potential customer dissatisfaction, you can be sure about the problems and rectify them accordingly. It helps you respond to the customers’ and reinforce your loyalty, and increase revenue-generation opportunities.