The revenue cycle is an important concept in many industries as it helps an organization deliver better services to customers.

So what exactly are revenue cycle and revenue cycle flowchart, and how does it work in different industries? Let's find out the answers to these questions in the following section!

What Is A Revenue Cycle?

A revenue cycle refers to a process that records revenue gained from products or services. This process involves all business activities and transactions, from receiving orders, a complex billing process to receiving payments from customers.

A standard revenue cycle flowchart

Generally, steps of the revenue cycle consist of the following phases:

  • Receiving an order
  • Processing the order
  • Billing and preparing invoices
  • Delivering goods and invoices to customers
  • Customers receive goods
  • Recording accounts receivable

The purpose of drawing this flowchart is to track the cash flow of the business. 

People often use this process to find out bottlenecks and compare them with those of competitors for possible improvements.

From a financial perspective, such a cycle plays a vital role in reducing the credit period and decreasing the likelihood of bad debts. 

It also helps the business make proper billing and invoice for customers, especially in a healthcare organization.

Pros and Cons of A Revenue Cycle


The biggest advantage of this process is that it helps reduce the period of time when products or services are charged and paid for by the customers.

Also, it will aid in automating the business processes. With a proper flowchart, the managers can decide the structure, fix bottlenecks, and have full control over the operations.

Last but not least, it enhances the accuracy in the billing and receipt of products and services delivered by the business organization. That is not to mention improved accounting of all deals.

In the healthcare industry, the healthcare revenue cycle process even plays a more important role due to the involvement of the insurance plan. Transactions will need lots of control by a medical biller, and this is where the healthcare revenue cycle flowchart comes in.


Revenue cycle management is complicated, so it is essential to set up training courses for the employees. Should any mistake happen, it will affect the whole process and lead to dire consequences.

More importantly, the managers need to assign different departments to different people for proper implementation. This is only applicable when your businesses have enough manpower.

How Does A Revenue Flowchart Work

In Healthcare

The healthcare industry requires the most complicated flowchart. In this case, a process starts when patients make a registration at the hospital or clinic. Next, patients receive treatment and pay for the costs from a healthcare provider during each patient visit. Payment is likely to involve health insurance companies or the current insurance coverage.

A good healthcare flowchart will reduce the number of claim denials and the cost of claims.

Healthcare revenue cycles are complex.

In Manufacturing

That flowchart in the manufacturing industry starts when a customer places an order, and the organization processes the order by making the products. The accounting department starts billing by a billing team and sends an invoice to customers by billing staff. 

Then, the goods are delivered to the logistics department to ship to customers. The process ends when a customer makes a payment, and the organization records such payment in the system.

In Services Industry

This process will be shorter than that in the manufacturing industry since it does not involve shipping. It starts when a customer places an order and ends when the organization receives payment with additional costs included.

The Bottom Line

A revenue cycle flowchart varies from industry to industry, but it is the same important since it always helps save valuable time and effort. An organization should consider its cost and use it properly as one of its automated tools to work more effectively.

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