Revenue Accounting in the Age of E-Business

This paper explores "revenue accounting" in contrast to traditional "cost accounting". Revenue accounting serves the information needs of managers and investors in planning and controlling a firm's sales activities and their financial consequences, especially in the age of E-Business. The paper explores some tentative remedies for the weaknesses. Several revenue mileposts are explored to gauge progress in earning revenues and a Markov process is applied to an example involving mileposts. Revenue momentum, measured by the exponential smoothing method, is examined as a way of getting feedback on revenue sustainability; and the use of the sustainability concept in the analysis of "fixed and variable revenues" is illustrated. A project-oriented approach in a manner similar to capital budgeting and to Reserve Recognition Accounting is proposed by treating each customer as a project.