How reducing revenue leakage could help your business stay in the black in FY2026

It’s time to stop legacy revenue management platforms and processes draining your profitability.

Is boosting the bottom line an overarching goal for your organisation in the upcoming financial year? If you answered in the affirmative, you’ll have your work cut out for you.

Across the country, businesses of all stripes and sizes have had a tough time of it in recent years, battling a collection of challenges including interest rate rises, persistent inflation, talent shortages and a volatile international trading environment.

Simply staying in business has been an achievement in itself, with many enterprises failing to do so. Some 3633 companies entered external administration in the first quarter of FY2025, an increase of 45.6 per cent on the corresponding period the previous year, according to ASIC.

Strategies to stay afloat

Striving to boost your sales and taking steps to reduce customer churn may help your business avoid joining their unfortunate ranks during the next 12 months.

But these aren’t the only measures available to leaders looking to shore up their operations and deliver a stronger set of results for FY2026.

The prevention of revenue leakage – a term used to describe the unknowing loss of revenue as a result of contract anomalies, billing inaccuracies and inefficiencies, and overdue and uncollected invoices – can be every bit as effective and, for many businesses, relatively easy to effect.

That’s because revenue leakage very often occurs due to human error, with mistakes in billing and invoicing a frequent occurrence within companies that rely heavily on old school tools, such as spreadsheets and standalone databases.

Costly collections

Late invoicing is another cause of leakage that’s common among high tech laggards. It inevitably leads to delayed payments and a higher incidence of non-payment, with research showing customers’ willingness to settle up is prone to diminish over time.

Manual dunning systems can result in more delinquent debtors and will add to your overheads too. Having members of your finance team emailing late payments reminders and calling clients to request they settle their accounts is an expensive and inefficient modus operandi, as is the use of spreadsheets to monitor and manage bad debts.

And calling in a collections service when internal efforts fail is the ultimate profitability killer. Yes, these highly trained third parties have a greater chance of clawing back what you’re owed but they’ll also clip the ticket on the way through, to the tune of up to 30 per cent of the value of the debt.

Counting the cost

So, how much money are businesses missing out on when funds trickle out the door courtesy of their sub-par revenue management systems and processes?

For businesses operating in manual mode, that don’t have access to AI-powered data analytics technology, revenue leakage can be impossible to quantify.

You can’t manage what you can’t measure and, in the absence of the right tools, plugging the leaks can be an arduous and inexact process.

Tools to make the task easy

That’s why it pays to invest in market leading revenue management technology, in the form of a cloud-based solution that offers flexible quote-to-cash lifecycle support.

Ideally, you’ll choose one that automates quoting and billing workflows, generates detailed accurate invoices, offers flexible payment options and combines dunning, collections and payment processing in a single automated solution.

Bonus points if it connects seamlessly with your CRM system and delivers sophisticated data analytics functionality – this will enable you to extract actionable insights you can use to optimise and expand your revenue leakage prevention measures.

Setting your business up for a stronger tomorrow in FY2026

That now is a tricky time to be in business is not in dispute. As we enter a new financial year, Australian businesses will be up against it maintaining profitability and viability in challenging conditions.

A compelling product or service offering, coupled with a stand-out customer experience, will keep customers coming through the door, while a robust leakage prevention strategy can help stop the profit they generate for your business diminishing or disappearing.

Against that backdrop, technology that enables you to monitor and manage every stage of the revenue management journey can be a powerful asset. If you’re serious about surviving and thriving in FY2026, it’s investment you can’t afford not to make.

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