Revenue recognition for software products can be a complex topic, but following these few simple guidelines will make consulting with your accountant a more pleasurable experience.
It’s all about accounting
A fundamental principle of revenue recognition states that money is considered revenue only if a product or service has been fully and completely delivered.
Immediate Delivery
Fraud prevention has always been an important part of the strategy of any e-business, but simply preventing as much fraud as possibly may be detrimental to your bottom line and your customers’ satisfaction.
We all know the obvious cost of fraud: A payment is processed, the product is delivered and the charge is disputed. However, maximizing accepted orders is just as important as minimizing fraud. If you only have your eye on minimizing fraud you may be leaving a lot of money on the table.
There are also other hidden costs to anti-fraud such as the cost of anti-fraud employees, the cost of decreased customer satisfaction by delaying orders in manual review (especially if they expect instant electronic delivery), the cost of rejecting a valid customer who seems suspicious but is in fact valid, and the direct and indirect costs of lost chargebacks.
This can be particularly insidious, because rates over 1% can result in large fines from Visa or Mastercard in the short term, and lost merchant accounts in the long term.
Different Anti-Fraud Strategies for Different Delivery Methods
Fraudulent orders for physically delivered products incur additional costs associated with the loss of the product and the price of shipping, along with the somewhat higher tendency towards “friendly fraud” (customers claiming the product never arrived in the mail).
This leads to the next important point: creating an anti-fraud strategy to minimize cost and maximize revenue depends on the type of product you sell. Products delivered electronically tend to have different fraud than products delivered physically. Read the rest of this entry »
Gartner is a well-known industry analyst firm with offices around the globe. Each year, they publish dozens of research reports, called Magic Quadrants, that cover the vendor landscape for a particular industry, such as web content management or social CRM.
Each Magic Quadrant identifies companies within that specific field as leaders, challengers, visionaries, or niche players. These designations are based on those companies’ “completeness of vision” and “ability to execute”. People use the Magic Quadrant as a benchmark and an input for making decisions about their e-commerce needs.
Once a year, Gartner publishes the Magic Quadrant for E-commerce that covers a topic near and dear to this blogger’s heart and it is that time again for 2011!
cleverbridge is currently offering this report, valued at $5,000, as a free download. Learn how Gartner views the e-commerce market by downloading your copy today.
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