Revenue Intelligence vs CRM

A CRM is the system sales works in: leads, deals, touchpoints and expected revenue. Revenue Intelligence uses the CRM as one of its sources and puts it next to contracts, orders and invoices to see whether what was sold is also invoiced and paid. The CRM tells you what sales thinks is coming in. Revenue Intelligence tells you whether that is right, and where it is not.

What does a CRM do, and what was it built for?

Salesforce, HubSpot, Pipedrive and similar systems are built to organise selling. They keep track of who the customer is, who the contact is, which deals are open, what stage they are in and when they are expected to close. They support the salesperson: tasks, reminders, emails, quotes.

That makes the CRM the best source for two things: what is in the pipeline and what sales has sold. It was not built to track what happens afterwards. Whether an order was entered correctly, whether the invoice carries the right price, whether the customer paid, whether a contract was indexed after two years: that happens in other systems, usually the ERP or the accounting package.

Why CRM data is therefore something different from financial data is explained in detail in Why CRM data is not the same as financial data.

Revenue Intelligence vs CRM reporting

Every CRM has reports. Pipeline value by stage, won revenue per month, conversion per salesperson, average deal size. Those reports are useful for sales management. The difference between Revenue Intelligence and CRM reporting comes down to three points.

Source. CRM reporting uses CRM data only. The "won revenue" figure is the sum of deals someone marked as won, at the amount the salesperson entered. Revenue Intelligence uses the CRM and the systems that come after it.

Moment. CRM reporting stops at the signature. For sales, the deal is done at that point. For revenue, that is where it starts: order, delivery, invoicing, payment, renewal, indexation.

Question. CRM reporting answers "how is sales doing?". Revenue Intelligence answers "is what we sold actually coming in, and at the agreed price?".

Where do CRM and billing drift apart in practice?

The differences between CRM and invoicing are rarely spectacular. They are ordinary things nobody notices because each system is correct on its own.

• Won without an invoice. The deal is marked closed-won. The order was never created, or it was created but never released for invoicing. The CRM report counts the revenue; the accounts do not.
• A different amount. The CRM says EUR 48,000. When the order was entered, a discount was applied that was not in the deal, or an option was forgotten. The invoice is EUR 42,500.
• A different term. The deal is a three-year contract. In billing, a one-year subscription was set up. After twelve months the invoices stop, while the customer carries on using the service.
• Upsell only in the CRM. An account manager records an expansion as a new deal. The existing licence in billing is not adjusted.
• Duplicate customers. The CRM holds "Van Dijk Engineering" and "Van Dijk Engineering Ltd" as two accounts. The link to the accounting system hangs off the wrong one.

How to work through this systematically yourself is described in How do you check CRM against billing?.

Worked example: won versus invoiced

Worked example: suppose a business services firm has 180 deals marked as won in a year, together worth EUR 3.6M. The accounts show EUR 3.42M in invoices for the same customers and period.

The difference is EUR 180,000. Part of it can be explained: deals delivered in the new year, invoicing in instalments, a customer invoiced through another company in the group. Suppose that after investigation EUR 110,000 is explained in this way. That leaves EUR 70,000 with no explanation: forgotten orders, wrong amounts, stopped subscriptions.

A CRM report shows EUR 3.6M and a green tick next to the target. An accounting report shows EUR 3.42M. Only when you put both side by side at deal level do you see the EUR 70,000. The amounts are made up to show the mechanism.

Why your CRM will not solve this on its own

The obvious thought is: then we will build it into the CRM. Add an "invoiced amount" field and let finance fill it in. That works for a short while. Then three things happen.

First, it is manual work. Finance has to look up and update a CRM record for every invoice. That happens for the first few weeks, and then less and less.

Second, it turns the CRM into a copy of the accounts, with all the risks of two versions of the same number. When they differ, which one is right?

Third, you still see nothing of what is in the contracts. An indexation clause, a minimum volume, an agreement on additional work: those live in a PDF or in people's heads.

Integrating a CRM with the accounting system so that deals automatically become orders solves part of it. That is valuable and is covered in How do you connect CRM to billing?. But an integration executes what has been configured. It does not check whether what happens matches what was agreed.

What Revenue Intelligence adds to the CRM

Revenue Intelligence does not replace the CRM. Sales keeps working in it. It adds a layer that reads the CRM and compares it with everything else:

1. Every won deal next to its order and invoice. With a list of differences: missing, different amount, different term.
2. Contracts next to invoices. Indexation, minimum volumes, rates for additional work.
3. Signals back to the CRM. A customer buying less, a renewal approaching with no action, an account waiting for an expansion. As a task for the owner, in the system they already work in.
4. An amount per finding. So it is clear what comes first.

The wider comparison with other software, such as BI, ERP and dashboards, is in Revenue Intelligence vs Business Intelligence. How AutoMaat's platform relates to the CRM specifically is covered in RiOS vs CRM.

Checklist: what your CRM does not tell you

Go through these points to see where your CRM reporting stops:

• Can you see for each won deal whether there is an invoice against it, and for what amount?
• For multi-year deals, do you know whether billing has also been set up for multiple years?
• Are upsells in the CRM also carried through into billing, and does anyone check that?
• Are discounts given by sales approved, and is the invoiced price the same as the approved one?
• Is there a single customer number that is the same in the CRM and the accounts?
• Who notices when a customer stops paying while the deal is still active in the CRM?

If you answer "no" or "don't know" to three or more of these, your CRM reporting gives too rosy a picture of what is really coming in.

Frequently asked questions

Do I need Revenue Intelligence if I already have a good CRM?

A good CRM makes Revenue Intelligence easier but does not replace it. The CRM does not see what happens after the deal. The trade-off is worked out in Do I need Revenue Intelligence if I already have a CRM?.

Don't Salesforce and HubSpot have revenue intelligence features?

They have features for pipeline analysis, forecasting and conversation analysis, sometimes under that name. Those focus on the sales phase. Checking invoicing against contracts and orders usually falls outside them, because that data is not in the CRM.

Should I clean up my CRM first?

No, not first. A comparison with the accounts is exactly what shows where the CRM is wrong. Cleaning up without that comparison means guessing which records are wrong.

Does Revenue Intelligence write back to the CRM?

That depends on the system. A sensible setup reads the CRM and writes findings back as a task or note for the owner, after approval. Changes to deal amounts or customer details should stay with a person.