A Revenue Reconciliation and Settlement System that was built to provide an automated and systemic approach to recognizing revenues across the various revenue streams of the organization.

1. Revenue Reconciliation and
Settlement Systems
Mahesh Patwardhan
Digital and New Media Consultant

2. Contents
1. Introduction and Overview
2. Ad Sales Contract and Credit Approval System
3. Web Services for Upstream Data
4. Revenue Reconciliation for Ad Sales
5. Revenue Reconciliation for Mobile Services
6. Revenue Reconciliation for eCommerce and
Subscription Services
7. Common Accounts Manager
8. Interface to GL Accounting System
9. Conclusion

3. Objective
 The Revenue Reconciliation and Settlement Platform
provides
◦ a process and a system for Revenue Reconciliation, Recognition
and Settlement across the various revenue streams of the
organization.
◦ Audit and SOX guidelines mandate that there needs to be
sufficient internal control on all financial reporting
◦ Company management and independent audit teams need to
attest to this disclosure.
 As the company is a listed company, in keeping with the
guidelines, there was a need to replace all the manual
processes and systems with automated processes and
systems that provided sufficient internal control on all
financial reporting of the company.

4. Need for a system
 Legacy system manual with the following shortcomings
 Inputs for accounting and revenue recognition were not automated
 Inputs from reports were created manually or generated by systems
◦ SMS – worksheets prepared from logs
◦ AdServer Reports passed on to Accounts
◦ Multiple sources for same service
◦ MIS, Cubot, Logs for SMS services
◦ OTS, MIS for E-Commerce, Subs
◦ Invoicing, Payments process was manual
◦ Different revenue source systems (RSS)
◦ Ad Sales , eCommerce, Subscription, Mobile Services
◦ Each Revenue Soure System is separately located and have little integration between them
◦ Each Revenue Source System involved separate entities for which accounting was done
independently.These were:
 Partners with whom business is conducted
 Payments to Partners, Bills for the same
 Collections from Partners, Invoices for the same
 Reversals and Chargebacks

5. Sub-systems

6. Sub-systems
 Web Services that provide
◦ Contract information from the Contract and Credit Approval System
◦ Delivery Reports from the Campaign Delivery System
◦ Order Revenue and Delivery information from the ecommerce,
esubscription and Mobile revenue streams
 The revenue reconciliation modules for the revenue streams
 The common accounts manager for invoicing and payment
settlements
 The integration with the GL Accounting system

7. THE AD SALES
CONTRACT AND CREDIT
APPROVAL SYSTEM

8. Introduction
 The Ad Sales Contract and Credit Approval System was built to
replace the existing process that was manual
 Contracts handed over by the Sales Executives to Finance for
booking.
 No control provided for the discounts being offered to the clients
or the credit offered to the clients or agencies.
 The objective of the new system was to provide a workflow system
to ensure proper approvals are obtained for order values, the
committed deliveries and the credit offered to agencies and clients.
 This direction led to the implementation of an Ad Sales Contract
and Credit Approval System
 System designed to have proper access controls and audit trails to
approve discounts and credit
 Properly manage contracts and schedule campaigns as per the
contracts that were approved and booked.

9. The Workflow

10. The Workflow
 The input to the system is the contract details which are
input by the Sales Person.
 The business rules are then applied on the contract and it is
routed to the necessary approving authorities for approval.
 Once the contract has been approved, it is then routed to
the Finance Department for final verification
 Booked as a confirmed order.
 Routed to the Campaign manager for scheduling and
delivering the campaign as per the approved contract.

11. Business Rules
 Business rules are at the core of the system.
 Rules as defined by the business that determine the workflow
for the contract and credit approvals.
 Rules cover agencies, networks and direct clients and events
and include the type of campaigns that need to be delivered.
 Rules involve internal sales people, finance and campaign
management group and approving authorities
 Rules are based on the credit-scores of the agencies/clients
and the discount limits applicable under various scenarios.

12. Features
 Contract Details Management
 Inventory CPM Sheet Management
 Property Code Management
 Approval/Rejection of Requisition
 Orders/Contracts
 Auto-delegation
 Contract Verification by Accounts
 Master Data Maintenance
 Access Control
 View Comments / Audit Trail

13. User Roles
 Defined User Roles in the system that accords privileges to the
users.
 Roles play a part in the business rules that decides the workflow
for the approval cycle.
 Roles and the privileges as accorded in the system
◦ CFO: Can approve as per the rules
◦ CMRO: Approve as per the rules, Master Data Maintenance
◦ VP Sales: Approve as per the rules, Master Data Maintenance
◦ Sales Mgr: Approve as per the rules
◦ Sales Exec: Enter new contracts, agencies, clients
◦ Accounts Mgr:View Contract details (verification), book contracts,
Master Data management
◦ Administrator: User Accounts Maintenance

14. Audit Trails
 The System maintains an audit trail for all user
activity on the system.
 This is a requirement for audit.
 The audit trail is maintained for
◦ User comments
◦ User actions
◦ Inventory Units Maintenance
◦ Property Units Mmaintenance
◦ Master Data Maintenance

15. WEB SERVICES FOR
UPSTREAM DATA

16. Data Sources
 For input of all contract details and the delivery reports into the ART
systems, web services were developed to provide the interfaces to allow
the data interchange between the various subsystems.
 These services were developed and provide either APIs or XML feeds for
the data interchange.
◦ Contract information from the Contract and Credit Approval System
◦ Delivery Reports from the Campaign Delivery System
◦ Order Revenue and Delivery information from the ecommerce, esubscription
and Mobile revenue stream
◦ Partner Statements from Vendors/Logistics Partners, Payment Gateways, Banks

17. …Data Sources
 Contract information from the Contract and Credit Approval System
◦ This provides all the contract information like the total contract value, the campaign deliverables, the start and
end date of the campaigns, the billing terms, etc.
 Delivery Reports from the Campaign Delivery System
◦ This provides the daily delivery reports which give information on every campaign that is delivered through all
of the Ad Delivery Servers which include the impression based Banner Ads Display campaigns, the click based
campaigns, and the newsletter based campaigns
 Order Revenue and Delivery information from the ecommerce, esubscription and
Mobile revenue streams
◦ This provides the order details of the orders received on the ecommerce and subscription systems, the sms
deliveries and product downloads from the mobile services, the order deliveries and the payment details from
the payment gateway and the banks, etc.
 Partner Statements from Vendors/Logistics Partners, Payment Gateways, Banks
◦ This provides the statement details from the various business partners like Vendors, Logistics Partners,
Payment Gateways and the Banks. The daily and monthly statements provided by these partners can be
reconciled with the statements generated by the system.

18. Web Services
 The data received from these web services is used to
reconcile the revenues accrued and used in the revenue
reporting, recognition and settlement processes

19. REVENUE
RECONCILIATION FOR
AD SALES

20. Revenue Reconciliation - Ad Sales

21. Inputs to ART-AdSales
 The inputs to the Revenue Ad Sales System (ART-AdSales) are the
following:
◦ Contract Data from the Ad Sales Contract and Credit Approval System
(ACA)
 This will give details on the total value of the contract, the committed deliveries,
the rates at which the campaigns have to be billed, the start and end dates of the
campaigns along with the details of the campaigns. This input data is used as the
reference while reconciling against the actual deliveries and the revenue accrued
from the campaigns
◦ Delivery reports from the OpenAd Ad Servers, Pay4Clicks Ad Server
and the Newsletters System
 This provides the actual deliveries that have taken place for the various campaigns
that have been configured in the different Ad Servers.
◦ Based on the deliveries and the business rules for recognizing the
revenue, the accrued revenue is calculated and the revenue is
recognized as per the business rules.

22. Processing and Business Rules
 Based on the inputs from the ACA and the delivery reports
the ART Ad Sales system will generate the revenue accrual
report for the day.
 All campaigns that are due for invoicing as per the business
rules will be processed and a billing advice will be generated
and the revenue for that campaign will be recognized.
 Some of the business rules that will trigger the generation of
a billing advice in the system are:
◦ End date of campaign reached
◦ Scheduled deliveries completed
◦ Quarter-end
◦ Month-end
◦ Year-end
 The billing advices will be generated based on the business
rules that are built into the system

23. Output from the System
 Billing Advice
◦ The billing advice will be input to the Common Accounts Manger which will in turn
generate the invoice for the client.
 Payment Advice
◦ The payment advice is the advice which gives the payment to be made to the partner
which is the revenue to be shared with the partner channels for displaying banners on
their sites across various channels. The revenue share is part of the contract with the
partners.
 Revenue Accrual Reports
◦ This gives a daily report for the revenue accrued for the time period selected across the
various properties and campaign types for the campaigns delivered during the given
period.
 Partner Channel Revenue Reports
◦ This gives a report on the payments to be made to the partners for the selected time
period based on the revenue sharing agreement and the clicks delivered on the partner
sites across various channels.

24. REVENUE
RECONCILIATION FOR
MOBILE SERVICES

25. Revenue Reconciliation - Mobile Services

26. Input to the System
 The inputs to the Revenue Mobile Services (ART-Mobile) are
the following:
 SMS deliveries from the application logs
◦ This will give details on the total number of SMS’s delivered for various
operator circles and keywords.
 Product downloads from the application logs
◦ This will give details of the total number of products of the different
vendors that are downloaded by the users.
 The master rates for keywords and product downloads.
◦ This provides the rates that have to be used to calculate the amounts
to be invoiced to the various operators across the different operator
circles and the payments to be made to the vendors for the product
downloads.

27. Processing and Business Rules
 Based on the inputs from the delivery logs for SMSs and the master rates in the
system, the ART Mobile system will generate a statement for each Operator in
each Circle.
 Based on the inputs from the delivery logs for product downloads and the master
rates in the system, the ART Mobile system will generate a statement for each
Vendor of the products.
 The Operator/Circle statements are made available to each Operator in each
circle who will then input his statement based on the records maintained at each
operator in each circle.
 The statements are reconciled and settled after being agreed to by all the parties
as required by the business rules built into the system.
 The Vendor statements are made available to each Vendor who will then input his
statement based on the records maintained with him.
 The statements are reconciled and settled after being agreed to by all the parties
as required by the business rules built into the system.
 Once the Operator and the Vendor statements are reconciled, the invoicing and
the payment advices are generated and sent to the Operators and the Vendors.

28. Output from the System
 The outputs from the system are the following:
 SMS counts statements
◦ This is a statement giving the counts of the SMSs sent for various operators across various circles for
different services using various keywords.
 Vendor product download counts statements
◦ This is a statement for the various product downloads for the various services and keywords for each
vendor that has products available for download.
 Billing Advice by Operator by Circle
◦ The billing advice is the advice which gives the amount to be invoiced for each Operator across each
circle for the SMSs that have been sent by users across various services using various keywords. This is
the amount that is payable by the Operator after reconciliation of the counts as per the business rules
in the system.
 Payment Advice to Vendors
◦ The payment advice is the advice which gives the payment to be made to the vendor for the products
that have been downloaded for that vendor the counts for which have been reconciled as per the
business rules.

29. REVENUE RECONCILIATION
FOR ECOMMERCE AND
SUBSCRIPTION SERVICES

30. Revenue Reconciliation for Ecommerce and Subscription
Services

31. Inputs to the system
 The inputs to the Revenue Ecommerce and Subscription Services
(ART-EComm) are the following:
 Order details from the Order Tracking System (OTS)
◦ This will give details of the total number of orders and the order value
received for various product categories and vendors.
 Payment Details from the Banks
◦ This will give details of the daily/monthly payments made into the bank
accounts for the products sold.
 Vendor payable statements
◦ This provides the amounts payable to each vendor for the products
sold on the site. This is the statement which will be reconciled with the
statement generated by the system.
 Logistics Partner Statements
◦ This provides the amounts payable to each Logistics partner for the
products sold on the site. This is the statement which will be reconciled
with the statement generated by the system

32. Processing and Business Rules
 Based on the inputs from the OTS the revenue accrued for the day
will be generated by the system.
 This will be reconciled with the collections at the payment gateway
and the banks.
 The vendor payable statements will be reconciled with the
statement generated by the system and the input from the vendor.
 The logistics payable statements are reconciled with the statement
generated by the systems and the inputs from the logistics
partners.
 The various statements are reconciled and settled after being
agreed to by all the parties as required by the business rules built
into the system.
 Once the Vendor and Logistics statements are reconciled, the
partner payment advices are generated and the payments made to
the partners.

33. Output from the system
 The outputs from the system are the following:
 Vendor Payable Statement
◦ This is a statement giving the amounts payable to the various vendors for the
products/services sold on the site.
 Logistics Payable Statement
◦ This is a statement for the amounts payable to the various logistics partners for
the products delivered to the customers.
 Payment Advice by Vendor/Logistics Partner
◦ The payment advice is the advice which gives the amount to be paid to each
vendor/logistics partner for the products sold and delivered. This is the amount
that is payable to the partners after reconciliation of the amounts as per the
business rules in the system.
 Bank Reconciliation Report
◦ The bank reconciliation report gives the payments received by the bank as
reconciled with the orders received on the site.

34. COMMON ACCOUNTS
MANAGER

35. Common Accounts Manager

36. Features
 The Common Accounts Manager is the single point of integration
with the GL Accounting package.
 It maintains a separate set of A/C Heads, for each instance of the
business partners mapped from each Revenue Sub-System.
 The Journal Vouchers are generated and maintained in CAM.
 The invoices are raised based on the billing advices received from
the various ART systems and entry of payments made against
payment-advices will be performed in the CAM application.

37. Inputs to the system
 Billing Advices from ART Ad Sales
◦ The CAM system will receive Billing Advices for each client based on the business rules and generated by the
ART Ad Sales systems and store them for processing and generating invoices for the agencies and clients.
 Payment Advices from ART Ad Sales
◦ The CAM system will receive Payment Advices for each Partner generated by the ART Ad sales system and
store them in the CAM system for processing payment to the Partners.
 Billing Advices from ART Mobile
◦ The CAM system will receive Billing Advices for each Operator Circle generated by the ART Mobile system
and store them for processing and generating invoices for each Operator Circle.
 Payment Advices from ART Mobile
◦ The CAM system will receive Payment Advices for each Vendor generated by the ART Mobile system and
store them for processing the payment to the Vendors.
 Payment Advices from ART Ecommerce
◦ The CAM system will receive Payment Advices for each Vendor and Logistics Partner generated by the ART
ECommerce system and store them for processing the payment to the Vendors and Logistics Partners.

38. Processing
 Generate Invoices / Payments for Operators,Vendors, Couriers,
Customers. Done based on the advices received from the various ART
modules and the invoices or the payments to be made will be processed
accordingly.
 Receive Collections against Invoices.
 Payments against Bills. Track payments made to the Vendors and Logistics
Partners for various services.
 Track all Outstanding Payables and Receivables from the various
operators, clients, agencies and track all payments to be made to Vendors,
Logistics Partners and Partner Channels.

39. …Processing
 Generate Reconciliation Reports.Various reconciliation reports for
payments and receivables will be generated by the system.
 Generate Accounting Vouchers. The system will generate journal
vouchers for all transactions.
 The system will provide a complete audit trail and record all
transactions that have taken place. This being an audit requirement
all user activity on the system is also tracked.
 Integration with the General Ledger Accounting System. The
Journal Vouchers summaries are exported at predefined intervals in
an automated manner.

40. Output from the system
 Invoices
◦ The invoices are generated as per the billing advices received from the
ART systems. These are processed and are available in the system as
soon as the advices are received and can be generated for presentation
to the clients whenever required.
 Accounts Receivables Reports
◦ These are reports that can be generated for the amounts that are
receivable against the invoices that have been raised for various clients.
 Payment Collections Reports
◦ These reports are for the payments that have been collected against the
various invoices that have been raised.
 JV Summaries
◦ The JV summaries are generated for export to the GL Accounting
system.

41. INTERFACE TO GL
ACCOUNTING SYSTEM

42. Interface description
 A Journal is a log which records all accounting events (financial transactions) for a
given business / businesses.
 Each entry that is made into a Journal is called a Balanced Journal Voucher and
consists of credit and debit sub-entries, against different relevant accounting heads,
such that the total credit sub-entries and debit sub-entries are equal (balanced).
 The CAM system maintains such a Journal across revenue sub-systems.
 The summaries of these JVs are then exported to the GL Accounting System.
 During the course of the CAM workflows, which take the Billing and Payment
Advices through their lifecycles, per-transaction balanced Journal Vouchers are
generated and maintained in CAM, against the appropriate CAM A/C Heads.

43. Input to the system
 The 4 JV generating events recognized by
CAM are as follows:
◦ Creation of a new PAYMENT ADVICE
◦ Payment made against a PAYMENTADVICE
◦ Raising INVOICE against BILLING ADVICE
◦ Entry of Collection against raised INVOICE

44. Processing
 Once the JVs are generated in the system,
they are processed and summarized for
export to the GL Accouting.
 The GL Accounting system offers a
mechanism by which the summaries can be
exported into the system.
 The summaries are converted into the
required file formats and the batch
processes are scheduled for the transfer of
the JVs into the GL System.

45. Output from the system
 The outputs from the system are the JV
summaries in the required file formats.

46. Conclusion
 The document described the Revenue Reconciliation and
Settlement System that was built to provide an automated and
systemic approach to recognizing revenues across the various
revenue streams of the organization.
 The audit and SOX requirements made it necessary to have a
system replace the existing manual processes.
 The inputs to the system are the various business data like
contract details, delivery details, order details, partner statements,
catalog rates. The processes are driven by a set of business rules
that are built into the system.
 The processing involves the reconciliation of the various
deliveries/orders against the payments received and payable to the
partners and the generation of billing and payment advices, and the
invoicing and the payments processing for the various business
partners.
 The JVs that are generated in the system are summarized and
exported to the GL Accounting system.

47. Revenue Reconciliation and
Settlement Systems
Mahesh Patwardhan
Digital and New Media Consultant