At its core, effective revenue management notices trends, processes and resource optimisation opportunities and creates a data-driven analysis for a more accurate business output forecast.
Although initially most common in the hospitality industry, revenue management systems have since transcended into multiple industries. Independent financial advisors (IFAs) have also started to utilise the benefit of revenue management in their own capacity to maximise profitability and efficiency.
Nevertheless, before we can fully value its importance, we must first understand the effect of financial management on your business.
What is revenue management?
It is a strategy that equips your business with data analysis capabilities to monitor and optimise all your incoming revenue streams.
No business can grow without the ability to analyse and adapt to change where needed. Revenue management does just this by tracking and assessing your various streams of incoming revenue based on observable data and analytics to implement informed growth strategies.
The tracking and collating of data, reporting and assessment and planning forecasting all make up an effective revenue management strategy. In the IFA sphere, an optimal revenue management process would be driven by automation and software capable of streamlining these repetitive tasks, freeing up IFAs’ time to focus on other core business processes.
Why is it important?
Recognising and appreciating the impact that different variables can have on your financial advisory practice’s overall profitability and growth is imperative. Because of this, a disciplined, error-free, and unified approach to data is vital for your decision-making process.
What to look for in a revenue management system
Many advisers utilise revenue management to get an edge over competitors, and this is because of the unified and in-depth data that it observes and collates. As a result of these extensive analytics processes, IFAs can easily identify growth opportunities and areas for improvement within their businesses.
A revenue management system is a software solution that enables you to utilise all the benefits of financial management efficiently and in a cost-effective and uncomplicated manner. It automatically collates all the data from your different revenue streams and identifies trends, opportunities and growth potential. A helpful revenue management system should offer:
- Streamlined Reporting
Reporting should require minimal effort. A helpful system should follow an integrated approach and cover all the common reporting needs while tailoring it to fit your bespoke company identity.
- Visual Analytics
Integrated, interactive visual analytics make it easier to spot trends and potential gaps. An effective revenue management system will utilise the benefits of an intuitive and easy-to-use platform, encouraging effortless interpretation of valuable insights.
- Automatic data ingestion and classification
Your financial management system should enable commission data to flow automatically into the system from different sources and channels. The data and fee information should then be automatically classified into your pre-determined categories. This ensures that your business is following industry best practices when it comes to data collation.
- Cloud-based and integration capabilities
Your commission management system of choice should be cloud-based and include integration capabilities. Integration with market-specific CRMs will allow for a more unified and more accurate approach to your specific business’s finance management.
At Commspace, we capture and collate all your commission and fee statements and present them on a unified management system that generates insightful and powerful yet easy-to-understand analytics.
Conclusion
Financial advisors face an immense workload regarding accurate calculations, splitting and managing their revenue streams and commission. The time spent on these administrative tasks hinders obtaining accurate forecasts or observable trends to grow their business.
