How do you gain insights into the sources of revenue, the effectiveness of utilization, and the performance of the business? How sure are you about the completeness of your revenue reporting? Are you working too hard but not seeing profits? Is your business experiencing high turnovers but not registering any tangible growth?
Is the cost to income ratio too high to sustain your business growth aspirations?
Now is time to consider revenue assurance services.
If you are in utilities, telecoms, financial services or even a fast-moving consumer goods business, conduct a revenue assurance to identify any potential revenue leakage. Every business is exposed to risks of fraud, wastages, losses due to error or mistakes and poor recording, among others.
What is revenue leakage?
The loss of revenue by omission or commission. Revenue losses due to errors, unintentional mistakes, or failure to update the system are called omissions. At one financial institution, a client signed a loan contract for the interest of 18%. But the system was updated in error with a 10% annual interest rate. Every year, the bank made a loss of 8% interest!
There are revenue leakages by the commission or by intension. Where someone deliberately commits fraud or theft, they lead to revenue leakages. The intentional misrepresentation of material facts to cause again to one party and a loss to another is a fraud.
To identity possible revenue leakages, you need to identify all sources of revenue against budget; and examine if all you expected was received. In complex business setups like banking, telecoms and utilities, you can reverse a loss-making position into a profit by closing the areas of leakages.
Remember, when people identify a way to steal from you, they will continue doing it until you identify the gaps and close them. A revenue assurance review helps provide an analysis of your revenue completeness so that you know all your revenue sources and confirm your systems are not letting you down.
Copyright Mustapha B Mugisa, 2021. All rights reserved.
