Revenue Leakage
Revenue leakage refers to the unintended loss of revenue that a business should have earned but failed to collect. This can happen due to various reasons including:
- Billing system errors or misconfiguration
- Missing or incorrect usage tracking
- Delayed or missed invoicing
- Incorrect pricing application
- Failed payment collection
- Manual billing process errors
- Misaligned entitlements and actual usage
Revenue leakage is particularly common in usage-based pricing models where complex billing rules, multiple pricing tiers, and high transaction volumes increase the risk of billing errors.
To prevent revenue leakage, businesses need:
- Accurate usage metering
- Automated billing processes
- Regular revenue reconciliation
- Clear audit trails
- Proper entitlement enforcement