#ASC 606 automation software

[techpsa]

Navigating Revenue Recognition Complexities in Professional Services Firms

Revenue recognition is one of the most critical—and complicated—financial processes for professional services firms. Whether you’re running a consulting business, IT services company, or engineering firm, recognising revenue at the right time is essential for maintaining financial accuracy, ensuring compliance, and supporting business growth. But unlike product-based companies that follow a relatively straightforward sales model, professional services firms face unique complexities in revenue recognition.

Understanding the Core Challenge

Revenue recognition isn’t just about recording income—it’s about reflecting the economic reality of service delivery. The question is not “when did we send the invoice?” but rather “when have we earned the right to record revenue?” This distinction becomes tricky when service engagements span weeks or months, involve multiple milestones, or are billed based on time, deliverables, or outcomes.

As a result, navigating revenue recognition complexities in professional services firms requires a deep understanding of both accounting standards and project operations.

Common Revenue Recognition Scenarios in Services Firms

Time-and-Materials (T&M): Revenue is recognised as services are delivered. However, accurately tracking time spent and aligning it with billable rates is essential.

Fixed-Price Contracts: These can stretch over several months, requiring revenue to be recognised over time, often using percentage-of-completion methods. Delays or scope changes complicate the process.

Milestone-Based Billing: Revenue is recognised when specific deliverables or milestones are completed. But what happens when milestones are delayed or disputed?

Retainers and Subscriptions: Often paid upfront, these require revenue to be deferred and recognised evenly over the agreed service period.

Key Challenges That Make Revenue Recognition Complex

Lack of Integration between project teams and finance, leading to poor visibility of actual work progress.

Manual Tracking, often through spreadsheets, increasing risk of error and inefficiency.

Changing Scope or Timelines, which impacts billing cycles and disrupts planned revenue schedules.

Regulatory Pressures, such as adherence to IFRS 15 or ASC 606, which require clear mapping of performance obligations and matching them to revenue events.

Solutions for Simplifying Revenue Recognition

1. Establish Clear Revenue Recognition Policies

Set clear, organisation-wide policies based on contract types and align them with global accounting standards. Educate project and finance teams to ensure consistent application.

2. Leverage PSA Software

Adopting a Professional Services Automation (PSA) platform enables firms to automate revenue tracking based on real-time project progress, milestones, and actual time logs. This reduces reliance on manual inputs and ensures compliance.

3. Improve Collaboration Between Teams

Create a unified process where project managers, delivery leads, and finance teams work from the same data source. This ensures revenue is only recognised when work is completed as per the contract.

4. Enable Forecasting and Visibility

With better tools and data, firms can forecast revenue more accurately, manage cash flow efficiently, and quickly adapt to project changes.

Final Thoughts

Revenue recognition doesn’t need to be a bottleneck. With the right systems, structure, and collaboration in place, professional services firms can simplify this complex process, gain financial clarity, and scale confidently. By navigating revenue recognition complexities with a strategic and tech-enabled approach, firms turn compliance into a competitive advantage—delivering accurate, timely, and trusted financial reports.

[vnmt]

An Ultimate Guide of NetSuite Implementation for SaaS Companies in 2025

Seamless management of operations and finance is the primary factor enabling SaaS companies to expand their growth over time. However, continuous growth in the SaaS industry creates difficulties for effective management and efficient handling of financial activities alongside subscriptions and customer databases. 

The cloud-based ERP system, i.e., NetSuite, delivers a single platform that integrates financial management with CRM solutions, billing capabilities, and revenue recognition features. However, it is quite challenging to handle the process of NetSuite implementation. Let’s have a deep dive into how NetSuite implementation strategies can be a powerful weapon in the hands of SaaS companies. 

Need for NetSuite Implementation for SaaS Companies

Implementing NetSuite enables SaaS companies to automate critical financial operations and increase operational effectiveness. It emerges as the cloud-based ERP solution that resolves numerous business challenges through its following features:  

Automated Revenue Recognition: It reduces the chance of manual mistakes and audit-related threats with its ASC 606 and IFRS 15 compliant financial reporting services. 

Subscription Management: The solution offers automated billing features for subscription renewals and plan upgrades, resulting in consistent customer interactions.  

Financial Visibility: It provides immediate financial assessment with advanced analytical reports, enabling SaaS companies to quickly follow essential financial data points. 

Scalability: It provides growing businesses with features to handle multi-entity structures, multiple currencies, and worldwide financial operations that simplify their expansion process.  

Top 5 Challenges in NetSuite Implementation for SaaS Companies  

Implementation of NetSuite provides enhanced automation and scalability together with clear financial visibility. Such a process seems to be easy, but it is not. It has to address the following challenges: 

1. Customization & Configuration Complexity  

Many SaaS companies underestimate the complexity involved in configuration to meet their specific requirements. These companies are unaware of the fact that excessive customization makes system updates harder, increases maintenance costs, and extends technical issues.

2. Data Migration Difficulties  

Successful migration processes should be structured appropriately as they prevent operations from halting and prevent inaccurate reporting and data corruption or loss. Organizational risk reduction comes from transparent data migration planning systems that integrate data purifying and confirming measures to deliver bold data transitions. 

3. Integration Challenges  

A SaaS business requires NetSuite to support the current operation of CRM platforms, payment gateways, and customer support software. The absence of effective system integration creates data storage spaces with conflicting data. This also diminishes operational decision quality and total operational performance. 

4. User Adoption Issues  

NetSuite implementation power becomes useless if employees find it challenging to operate the system. As a result, it becomes essential to opt for an organized change management approach combined with practical training, employee involvement, and constant support. Such an approach is a direct door for an easy adaptation of the NetSuite.  

5. Compliance and Regulatory Risks  

SaaS companies must fulfill various financial and data protection requirements comprising tax laws, GDPR standards, and ASC 606 compliance guidelines. Inadequate implementation setups present businesses with various compliance issues that result in financial penalties and system operation problems.

Also Read: NetSuite for SAAS Companies

8 Best Practices for a Successful NetSuite Implementation  

The successful optimization of operations for SaaS companies depends entirely on achieving well-defined objectives and qualified employee training throughout each succession step of NetSuite implementation. To maximize NetSuite's implementation benefits, demands for the following best practices: 

1. Define Clear Business Objectives

Every effective NetSuite implementation depends on having established performance goals from the company. Since NetSuite needs to serve company needs and ensure lasting growth strategy implementation, the presence of established objectives allows the system to match business requirements.  

2. Choose the Right NetSuite Edition  

NetSuite provides its solutions specific to SaaS business requirements. Companies can choose the right edition from SuiteSuccess for Software or Subscription Billing. This helps the companies manage ASC 606 compliance, automate billing cycles, and track deferred revenue to improve efficiency and ensure regulatory compliance.

3. Involvement of Stakeholders 

A successful NetSuite implementation requires cooperation from different departments of the organization. To ensure the smooth running of the integration process, key team members, such as sales, finance, IT, and customer support must work in collaboration with each other. Such cooperation will help in the detection of integration points early and also make a balance with existing workflows to simplify the essential processes.  

4. Plan Data Migration Strategically  

SaaS businesses face significant data migration challenges when they handle massive quantities of customer data, financial records, and subscription management requirements. The migration process should incorporate staged implementation by first cleaning and validating the data so inconsistencies remain eliminated while minimizing data loss to help achieve system transition success. 

5. Leverage NetSuite’s Automation Capabilities  

NetSuite implementation enables automated execution of recurring billing and revenue recognition processes, financial reporting, and compliance tracking. This allows SaaS companies to achieve improved efficiency levels, reduced manual errors, and enhanced resource allocation toward strategic business initiatives. 

6. Ensure Seamless Integration with Third-Party Applications  

Most SaaS businesses depend on a combination of Salesforce as their CRM system, Stripe for payment handling, and Zendesk for customer support operations. An optimized integration between NetSuite and third-party applications improves workflow consistency and produces complete data coherence while eliminating unnecessary processes. 

7. Invest in Employee Training and Support  

Introducing a new ERP system often leads to significant changes throughout daily operational activities. Providing structured training, simple guides, and ongoing support helps employees learn NetSuite effectively. This reduces disruptions, maximizes system use, and increases return on investment. 

8. Partner with an Experienced NetSuite Implementation Partner  

Implementing systems with NetSuite specialists who possess experience produces enhanced setup results with improved workflow design capabilities and solution quickness. This will ultimately help SaaS companies reduce implementation time while minimizing risks. You can seek help from NetSuite implementation partner to allow your SaaS businesses to enhance their operations and scale their business efficiently without sacrificing compliance requirements.  

Conclusion

The SaaS industry benefits significantly from NetSuite as this cloud-based solution enables real-time tracking plus operational scalability with automated processes. SaaS companies can achieve a smooth NetSuite transition and long-term success by implementing best practices with the expert team of VNMT Solutions. We strive to deliver the best implementation services specifically designed to address the needs of SaaS business operations.

[proexcellencybanglore]

Why SAP RAR Online Training with ProExcellency is a Game-Changer for Finance Professionals

Fast-Paced Financial Landscapes Dominate Business Today Changes in compliance remain an ongoing reality, and the revenue recognition process becomes complex, as record maintenance remains intricate. An effective SAP solution alleviates these issues by emerging as a streamlined mechanism of revenue recognition under IFRS 15 and ASC 606 standards. ProExcellency's SAP RAR Online Training is designed to empower finance professionals with the skills that bring success to this dynamic environment. This comprehensive guide explores some of the unique benefits the ProExcellency SAP RAR course poses and why it is a critical investment for your career.

Understanding SAP RAR and Its Importance

The SAP RAR is a software that allows revenue recognition at an advanced level. It helps companies adhere to the global accounting standards and improves business operational efficiency. Highly important to subscribers, complex contractors, and multi-element arrangement companies like IT, telecom, and software industries: The system automates processes, reduces manual intervention, and ensures accurate reporting.

SAP RAR key benefits:

Aligns revenue recognition processes with Global Standards including IFRS 15 and ASC 606

Accurate: Greatly reduces the chance of errors during revenue calculation with automation capabilities

Large Scale Capability: Can easily handle complex scenarios in revenue recognition

Enables Informed Decisions: Real-time information in making better financial decisions

Why ProExcellency for SAP RAR Training?

ProExcellency serves as one of the excellent SAP solution training providers, with an SAP RAR Online Training program that is tailored towards acquiring theoretical knowledge and their practical application. Here's what makes ProExcellency a trustworthy choice:

Expert Trainers: Learn from industry experts with extensive experience in implementing SAP RAR, best practices, and hands-on experience.

Comfortable Learning Options: Attend live online sessions or access recorded modules as per convenience.

Comprehensive Curriculum: Cover all aspects of SAP RAR, from configuration to real-world use cases.

Interactive Learning: Participate in hands-on projects, case studies, and live Q&A sessions.

Certification Support: Gain the confidence to pass SAP RAR certification exams with dedicated guidance.

Course Highlights: What You’ll Learn

ProExcellency’s SAP RAR Online Training is structured to provide a deep understanding of revenue recognition processes and system implementation. 

Key modules include:

Introduction to SAP RAR

Overview of IFRS 15 and ASC 606

Knowledge of the SAP RAR activity in compliance

Master Data and Configuration

Configuring master data for Revenue Recognition

Customizing system configurations

Revenue Recognition Process

Contracts management and performance obligations

Automation of allocation and recognition of revenues

Reporting and Analytics

Ensuring correct financial reports

Using analytics of SAP RAR in decision-making

Co-Existence with Other Modules

Co-integration of SAP RAR with SD, FI, etc. modules of SAP

Actual data migration and reconciliation

Real-World Case Studies

SAP RAR implementation in real scenarios

Best practices in over-coming commonly encountered issues

How SAP RAR Training is Helping Expand the Career Horizons

SAP RAR certification can unlock fascinating career avenues in finance, accounting, and IT. Here's why:

Finance Professionals: Acquire the knowledge of compliance and reporting, making you a must-have in your organization.

SAP Consultants: Acquire the specialisation which is most sought-after and hence increase your market value.

Controllers and Auditors: Enhance your ability to manage accurate financial operations.

IT Professionals: Help them understand how to set up and maintain SAP RAR systems, so that they perform flawlessly.

Questions and Answers

Q&A for SAP RAR Online Training with ProExcellency

Q1. What is SAP RAR, and why is it useful?

A:

The SAP RAR is a system that eases and automates revenue recognition, thereby keeping one updated with the global accounting standards, including IFRS 15 and ASC 606. It is, for example, an important solution for companies that have tough contracts, multi-element arrangements or subscription-based revenue models. It minimizes human effort, avoids errors, and offers greater accuracy in financial reporting.

Q2: Who should enroll in the ProExcellency SAP RAR Online Training?

A:

ProExcellency SAP RAR Online  Course is suitable for:

Finance practitioners seeking to learn about revenue recognition

SAP Consultants wanting to have a sought-after specialization

IT specialists setting up and implementing SAP modules

Controllers and auditors checking compliance and account efficacy.

This online training is quite helpful for professionals working in industries such as IT, telecom, and software, where revenue recognition proves to be tricky.

Q3: What topics will the SAP RAR Online Training ProExcellency Teach?

A:

The course covers a wide range of topics. They include:

Overview of IFRS 15, ASC 606, and SAP RAR's role in compliance - Introduction to SAP RAR

Configuration: Setup master data, define performance obligations, and revenue allocation rules customization.

Revenue Recognition Process: Automate and regulate revenue computations and assignments.

Reporting and Analytics: Get proper financial statements and use live analysis.

Integration: Connect SAP RAR with other modules such as SD and FI.

Real-World Case Studies: Practical demonstration of SAP RAR in industries

Q4: What are the benefits of the SAP RAR Online Training by ProExcellency?

A:

Advantages of joining with ProExcellency:

Skilled Trainers: Learn from industry experts with hands-on experience on SAP RAR.

Thorough Curriculum: All topics from Basic Concepts to Advanced Use Cases

Flexibility: Attend live sessions or access recorded modules as it suits your schedule

Preparation for Certification: Access resources and support to pass SAP RAR certification exams

Interactive Learning: Interactive use cases, case studies, and LIVE Q&A

Q5: What is the format of ProExcellency's SAP RAR Online Training?

A :

The online, live instructor-led training is combined with recorded lectures for self-study. Students get all of the following:

Interactive projects in which they can use learned concepts

Case studies to understand real-world applications

Dedicated support for queries as well as technical issues

Q6: How does ProExcellency support career advancement after completing a course?

A:

ProExcellency offers:

SAP RAR Certification Preparation: Get ready for exams with mock tests and expert guidance

Real-World Skills: Practicing to implement SAP RAR solutions.

Career Counseling: Provision of employment placement support and professional counseling.

Conclusion

ProExcellency's SAP RAR online Certification is more than a program-it can be a door to mastering the art of revenue recognition and unlocking career paths in the finance and IT sectors. With a curriculum designed for application, learning flexibility, and support by experts, ProExcellency gives you the professional power to achieve your professional aspirations. Do not miss this chance to uprise and enroll now in becoming an SAP RAR expert.

[oracle-fusion-financials-1]

Overview of Dunning, Revenue Recognition, and Customer Relationship Management (CRM)

In today’s business landscape, maintaining a balanced approach to financial management, customer engagement, and revenue recognition is essential for sustainable growth. Three crucial pillars of this approach are dunning revenue recognition, and customer relationship management (CRM). These practices each play a unique role in managing financial health, optimizing customer experience, and ensuring regulatory compliance.

Let's take a closer look at each of these areas and explore how they contribute to an effective business strategy.

1. Dunning: Effective Management of Overdue Payments

Dunning refers to the systematic process of communicating with customers to ensure overdue invoices are settled. When a customer’s payment becomes overdue, companies initiate a dunning process that includes reminders, follow-ups, and escalations aimed at securing payment.

Steps in the Dunning Process:

Initial Reminder: A gentle notification reminding customers of the upcoming or overdue payment.

Follow-Up Notices: Additional reminders, often with increased urgency and a detailed explanation of the payment due.

Escalation: In cases of prolonged delay, the matter may be escalated to collections agencies or legal recourse, if necessary.

Key Benefits of Dunning:

Improved Cash Flow: Consistent follow-up on overdue payments enhances cash flow, which is essential for meeting operational costs.

Customer Relationship Preservation: When handled professionally, the dunning process can encourage timely payments without alienating the customer.

Risk Mitigation: Regular communication and escalation allow businesses to detect and manage potential bad debts before they worsen.

Best Practices for Dunning:

Automate the Process: Many ERP and CRM systems offer automated dunning modules that send reminders based on predefined timelines.

Use Tiered Communication: From gentle nudges to firm notices, tiered communication can increase the likelihood of timely payment.

Maintain a Customer-Centric Approach: Dunning should aim for a resolution, not punishment. It’s vital to keep communications professional, polite, and solution-focused.

2. Revenue Recognition: Ensuring Compliance and Accuracy

Revenue Recognition is the process of recording revenue on financial statements. While this may seem straightforward, it’s often more complex due to various factors like the timing of delivery, customer payment terms, and contract specifics. Regulatory standards, such as ASC 606 (Revenue from Contracts with Customers), guide revenue recognition practices to ensure consistency, transparency, and fairness.

Key Principles of Revenue Recognition:

Identify the Contract: Establish that there’s a legally enforceable agreement with the customer.

Determine Performance Obligations: Identify distinct goods or services that the customer has agreed to receive.

Allocate Transaction Price: Distribute the total transaction price among performance obligations based on standalone selling prices.

Recognize Revenue: Revenue is recognized once the performance obligations are satisfied.

Why Revenue Recognition Matters:

Regulatory Compliance: Following revenue recognition standards helps businesses avoid legal penalties and ensures that financial statements are transparent.

Accurate Financial Reporting: Proper recognition results in more accurate financial reporting, helping stakeholders understand the company’s true financial performance.

Stakeholder Trust: Clear and reliable financial statements foster trust among investors, employees, and customers, supporting long-term growth.

Best Practices for Revenue Recognition:

Use Specialized Software: Revenue recognition software, often integrated within ERP systems, helps automate and simplify compliance.

Stay Updated on Standards: As standards evolve, it’s crucial to train finance teams on the latest guidelines.

Collaborate Across Departments: Finance, legal, and sales teams should collaborate to ensure contracts align with revenue recognition standards.

3. Customer Relationship Management (CRM): Building and Sustaining Customer Loyalty

Customer Relationship Management (CRM) is the practice of managing and analyzing customer interactions throughout the customer lifecycle. A CRM system captures, organizes, and analyzes customer data, enabling businesses to better understand and meet customer needs.

Core Components of CRM:

Sales: CRM helps sales teams manage leads, track interactions, and close deals more effectively.

Customer Service: CRM provides customer service teams with access to customer history, which enables faster and more personalized responses.

Marketing: CRM data allows marketers to segment customers, personalize campaigns, and measure engagement.

The Value of CRM:

Improved Customer Experience: Personalized interactions based on CRM data help meet customer expectations and improve satisfaction.

Increased Sales and Retention: CRM helps identify cross-sell and upsell opportunities, boosting customer lifetime value.

Data-Driven Insights: CRM systems offer insights into customer behavior, purchasing patterns, and feedback, guiding business strategy.

Best Practices for CRM:

Centralize Data: Ensure that customer data is consolidated and accessible to relevant departments.

Automate Workflows: Automation can enhance efficiency, from lead nurturing to follow-up reminders.

Focus on Integration: Integrating CRM with other business systems, such as ERP and marketing automation tools, enables seamless data sharing and a 360-degree customer view.

How These Components Work Together

Dunning, revenue recognition, and CRM are closely interrelated. CRM data can inform the dunning process by highlighting high-value customers and providing insights on payment behavior. Effective dunning ensures timely revenue, which aligns with accurate revenue recognition. Meanwhile, revenue recognition supports CRM by providing clear and trustworthy information to customers about billing and payments.

Implementing these systems together allows a company to create a robust and cohesive financial and customer management framework. By integrating dunning, revenue recognition, and CRM practices, businesses can streamline operations, foster customer loyalty, and achieve sustainable financial health.

Conclusion

Together, dunning, revenue recognition, and CRM form a strategic trio for successful business management. Dunning keeps cash flow steady, revenue recognition ensures compliance and transparency, and CRM builds strong customer relationships. When harmonized, these processes not only boost operational efficiency but also strengthen customer loyalty and provide a clearer picture of the company’s financial health.

For businesses seeking sustainable growth, investing in these areas and aligning them with their goals can lead to a competitive advantage and long-term success. To Your bright future join Oracle Fusion Financials.

[productiveandfree]

How to Simplify Billing to Scale Your B2B SaaS Business

On average, organizations use 130 SaaS apps.

With the B2B SaaS market projected to grow to $1,088.15 billion by 2030, there’s a huge chance that more organizations will use more apps in the future. This means that B2B SaaS businesses should scale their business to accommodate more clients.

However, as your customer base grows, billing can quickly become complex and time-consuming. That’s why knowing how to simplify billing for B2B SaaS businesses is crucial. Streamlining this process lets you focus on scaling your business instead of getting stuck in administrative tasks.

In this post, I'll discuss seven effective ways to make billing easier and more scalable.

7 Ways to Simplify Billing for B2B SaaS Businesses

Complex billing processes can slow down your operations, create confusion among your customers, and hurt your cash flow.  You need a simple, efficient billing system to truly scale your business.

So, how can you make that happen?

1. Automate Recurring Billing

As discussed in the Attrock guide, automating recurring billing is one of the simplest ways to simplify B2B SaaS billing. You don't have to worry about manually invoicing your customers if you use recurring billing software.

Instead, the software takes care of the heavy lifting, thereby: 

●     Eliminating manual invoicing, saving you time and effort

●     Reducing errors

●     Ensuring the timely sending of all invoices

●     Handling a growing customer base and multiple pricing tiers easily

●     Providing accurate financial data, helping you track revenue effectively

●     Supporting your business growth without being overwhelmed by details

Automating recurring billing allows you to handle hundreds or even thousands of customers without breaking a sweat. Besides, 86% of SaaS professionals already agree that automation helps optimize SaaS operations.

2. Simplify Revenue Recognition

Accurate revenue recognition is essential for running a B2B SaaS business. It involves identifying when your business earns money to ensure correct financial reporting.

According to the Younium, your revenue recognition must comply with IFRS 15 and ASC 606 standards and Guidelines.

Nevertheless, this process can be a headache, especially with different customer contracts and subscription plans.

Here’s how to make it a bit simpler:

●     Use specialized software to automate and standardize revenue recognition.

●     Establish clear internal policies for revenue recognition.

●     Regularly review and update contracts to align them with the latest standards.

●     Automate financial reporting by integrating billing and revenue recognition software with accounting platforms for real-time revenue insights.

Compliance aside, accurate revenue recognition also helps maintain investor trust and create long-term goals for your business.

3. Implement Self-Service Portals

Did you know that fast response times are the most important element in ensuring excellent customer service in the B2B SaaS space?

Simplifying B2B SaaS billing to boost CX doesn’t get any easier than customer self-service portals. Customers want to have the ability to handle things on their own – 60% of software users prefer using self-service portals over other channels for billing. 

How do self-service portals simplify B2B SaaS billing? Well, they:

●     Give customers the liberty to manage their accounts, view invoices, and pay whenever they want

●     Increase transparency and build trust because customers get real-time access to their billing info

●     Increase productivity and efficiency since the customers can take care of their own billing solutions

●     Enhance customer experience and satisfaction

●     Provides insights into customer behavior, helping you improve your services and billing practices

4. Leverage Accounting Tools

Managing finances can be overwhelming, especially for B2B SaaS startups who are still learning the ropes. Consider investing in specialized tools for accounting for startups to simplify bookkeeping and billing processes.

These tools are perfect for new companies as they make money management easier without getting lost in complicated spreadsheets. They automate tasks like invoicing, expense tracking, and financial reporting to help you save time and reduce errors.

These automation features not only simplify B2B SaaS billing but also ensure accuracy, which is crucial for scaling businesses. Additionally, they offer real-time financial insights that allow you to make informed decisions and quickly address potential issues.

Maintaining a strong accounting system as your business grows helps keep your billing simple, accurate, and adaptable.

5. Consult with Business Mentors

Sometimes, a little guidance from experts is all you need to simplify billing processes. Leveraging business mentoring services can provide valuable insights into how to simplify B2B SaaS billing processes.

Mentors can help you identify potential pitfalls, suggest best practices, and offer tips that align with your growth goals. They can also introduce you to tools and techniques that you might not have considered, making your billing process more efficient and scalable.

They also bring a fresh perspective, helping you see opportunities for improvement that you might have missed. Their experience can save you time and resources by steering you away from common mistakes.

Additionally, mentors can connect you with a network of professionals who can further support your growth.

6. Adopt a Usage-Based Billing Model

Imagine going to a buffet where you only pay for the food you eat, rather than a flat fee.

Wouldn't that feel more fair and flexible?

That's the idea behind adopting a usage-based billing model. It supports the expansion of your business by charging customers based on how much they use your software. This makes it a no-brainer for you to calculate fees.

This approach also streamlines billing by getting rid of confusing pricing and avoiding common billing mistakes.

Plus, this billing model is easy for customers to understand. It’s ideal for clients where usage varies widely, providing flexibility and transparency in pricing.

7. Enable Multiple Payment Options

Offering various payment options simplifies B2B SaaS billing by making it easier for your customers to pay. This flexibility is highly important for the growth of your B2B SaaS product as it helps you serve a diverse customer base.

When customers can choose their preferred payment method, you reduce friction in the payment process. This leads to faster payments and fewer errors and delays, especially since customers can easily switch to another payment method if their preferred one is unavailable.

Additionally, with more options, you reach international customers who may have different preferences or limitations regarding payment methods.

Lastly, providing multiple payment options ensures convenience for your customers, which is their leading factor for choosing a preferred payment method.

How to Simplify Billing for B2B SaaS: Final Thoughts

Learning how to simplify billing for B2B SaaS businesses is not just about cutting down on paperwork or reducing time spent on administrative tasks. It’s about creating a system that works for you, your team, and your customers.

Following these strategies helps improve productivity and efficiency but, most importantly, they can make it easier for you to scale your business.

Keep refining your processes, stay updated with new tools and techniques, and seek expert advice. Build a strong foundation for business growth and success!

Reena Aggarwal

Reena is Director of Operations and Sales at Attrock, a result-driven digital marketing company. With 10+ years of sales and operations experience in the field of e-commerce and digital marketing, she is quite an industry expert. She is a people person and considers the human resources as the most valuable asset of a company. In her free time, you would find her spending quality time with her brilliant, almost teenage daughter and watching her grow in this digital, fast-paced era.

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[instantpay]

How SaaS Financial Management Helps Companies Grow

In the rapidly evolving landscape of Software as a Service (SaaS) companies, 73% of SaaS companies say they struggle with managing cash flow. (Source: Fundbox, 2023). Thus, SaaS financial management plays a pivotal role in ensuring sustainable growth and profitability. This comprehensive guide delves into the significance of Finance as a Service (FaaS) for SaaS businesses, elucidating how it facilitates growth, optimises operations, and drives strategic decision-making. Through a detailed exploration of FaaS, this document equips SaaS entrepreneurs and financial professionals with actionable insights to harness its transformative potential.

The proliferation of SaaS companies has revolutionised the way businesses operate, offering scalable and cost-effective software solutions across various industries The global SaaS market is expected to reach $674.4 billion by 2025, growing at a CAGR of 13.2% (Gartner, October 2023) 

Amidst intense competition and evolving market dynamics, achieving sustainable growth and profitability remains a formidable challenge. Effective financial management emerges as a linchpin in navigating these complexities, empowering SaaS enterprises to capitalise on opportunities and mitigate risks.

Finance as a Service (FaaS) emerges as a compelling solution, leveraging technology and expertise to streamline financial processes, enhance transparency, and drive strategic decision-making. This guide aims to elucidate the multifaceted role of effective SaaS Financial Management in empowering companies to achieve their growth objectives, from optimising cash flow management to facilitating data-driven insights.

Also Read: - How Banking-as-a-Service (BaaS) is Transforming the Fintech Market - How Platform-Based Banking is Changing the Game - How Automated Payouts Can Help Businesses Manage their Finances

About the SaaS Industry

The SaaS industry is a dynamic ecosystem characterised by innovation, scalability, and rapid evolution. From enterprise solutions to niche applications, SaaS companies cater to diverse clientele across various sectors. This market's growth trajectory is impressive, with projections indicating that the global SaaS market will reach $674.4 billion by 2025, growing at a remarkable CAGR of 13.2% (Gartner, October 2023). However, amidst this exponential growth, SaaS companies grapple with financial challenges that threaten their sustainability and expansion.

SaaS Financial Management Challenges Faced by Businesses

Despite the immense growth opportunities presented by the SaaS model, companies operating in this space often encounter unique financial challenges that can hinder their progress. Some of the key challenges in SaaS financial management involve:

Revenue Recognition Complexity: SaaS companies often grapple with complex revenue recognition rules due to the subscription-based nature of their business model. Determining when to recognise revenue, especially for long-term contracts or multi-year subscriptions, requires careful accounting treatment to ensure compliance with accounting standards such as ASC 606 (IFRS 15).

Cash Flow Volatility: SaaS companies may experience fluctuating cash flows due to factors such as seasonality, customer churn, and the timing of subscription renewals. Managing cash flow effectively is crucial for sustaining operations, funding growth initiatives, and servicing debt obligations.

Financial Planning and Analysis (FP&A) Complexity: Forecasting revenue, projecting expenses, and optimising resource allocation are critical aspects of financial planning for SaaS companies. However, the dynamic nature of the SaaS market, coupled with evolving customer preferences and competitive dynamics, adds complexity to FP&A processes.

Scalability and Resource Constraints: As SaaS companies scale their operations, they face challenges related to resource constraints, including talent shortages, technology infrastructure scalability, and operational inefficiencies. Balancing growth ambitions with resource limitations requires strategic financial management.

The Emergence of Finance as a Service (FaaS)

In response to the SaaS financial management challenges companies face, Finance as a Service (FaaS) has emerged as a transformative solution. FaaS represents a paradigm shift in financial management, offering SaaS companies the flexibility, scalability, and expertise needed to optimise their financial operations. But what exactly is Finance as a Service?

Understanding Finance as a Service (FaaS)

Finance as a Service (FaaS) is a comprehensive financial management solution that leverages technology, automation, and specialised expertise to support organisations in managing their finances effectively. By outsourcing financial functions to experienced professionals and utilising advanced software platforms, SaaS companies can streamline their financial operations, enhance decision-making, and mitigate risks.

At its core, Finance as a Service encompasses a range of financial activities outsourced to third-party providers, including accounting, bookkeeping, financial reporting, budgeting, cash flow management, invoice management, expense tracking, and risk management. By entrusting these critical functions to FaaS providers, SaaS companies can focus on their core competencies while benefiting from specialised financial expertise and cost-effective solutions for SaaS financial management.

Key Components of FaaS

To comprehend the full scope and potential of Finance as a Service, it is essential to delineate its key components:

[wptb id=2878]

By integrating these key components, Finance as a Service platforms offer comprehensive SaaS financial management solutions, empowering businesses to streamline operations, optimise resources, and make informed decisions to drive growth and success.

Practical Applications of Finance as a Service in SaaS

The adoption of Finance as a Service has yielded tangible benefits for SaaS companies across various industries. Let's explore some real-world use cases showcasing the transformative impact of FaaS:

A SaaS company accelerates its market presence but faces challenges in managing its financial operations effectively. By integrating with a FaaS provider's platform, the startup gains access to robust expense tracking, reporting, and reimbursement functionalities. With streamlined expense management processes and real-time insights into spending patterns, the startup enhances operational efficiency, reduces administrative overhead, and empowers users to make informed financial decisions. As a result, the expense management platform attracts more users, expands its customer base, and establishes itself as a leader in the market.

A mature SaaS enterprise seeks to enhance its payout processes and drive customer satisfaction.  With seamless integration of payout optimization functionalities into its platform, the SaaS enterprise improves user experience, increases transaction volumes, and strengthens customer loyalty. As a result, the digital payments platform solidifies its position as a market leader and achieves sustainable revenue growth.

A startup SaaS aims to revolutionise debt recovery processes for businesses across diverse industries. However, manual collections management and reconciliation tasks present operational challenges and hinder scalability. By partnering with a FaaS provider specialising in collections management automation, the startup integrates advanced collections algorithms, payment reminders, and automated reconciliation workflows into its platform. With seamless synchronisation of transaction data, personalised collections strategies, and real-time monitoring capabilities, the startup empowers businesses to streamline debt recovery processes, reduce delinquency rates, and optimise cash flow. As businesses embrace the collections management solution, the fintech startup expands its market presence, fosters customer loyalty, and drives revenue growth.

Another Company wishes to empower businesses with actionable insights into their financial performance. However, developing and maintaining comprehensive financial analytics capabilities pose resource and expertise challenges. By collaborating with a FaaS provider specialising in API-driven financial insights, the company gains access to a wide range of financial data sources, analytical tools, and customizable APIs. With seamless integration of financial analytics functionalities into its platform, businesses can access real-time financial metrics, benchmark performance against industry peers, and uncover actionable insights to drive strategic decision-making. As businesses leverage the fintech company's API-driven financial insights, the company expands its customer base, drives API usage growth, and establishes itself as a trusted provider of financial intelligence solutions.

Instantpay

The adoption of Finance as a Service has yielded tangible benefits for SaaS companies across various industries. 

Among these, Instantpay stands out as a comprehensive SaaS financial management solution provider offering a suite of features essential for SaaS companies. 

1. Streamlining Payment Processes with Instantpay Integration:   

As SaaS companies strive for operational efficiency, optimising payment processes becomes paramount. By integrating Instantpay into their financial infrastructure, SaaS enterprises can facilitate real-time payments, ensuring faster transactions and improved cash flow management. Instantpay's seamless integration with existing systems enables SaaS businesses to offer their customers frictionless payment experiences, enhancing satisfaction and loyalty.

2. Enhancing Customer Experience through Instant Payouts:

In the competitive landscape of SaaS, customer satisfaction is key to retaining and attracting users. With Instantpay's payout optimisation solutions, SaaS enterprises can offer instant payouts to their customers, reducing transaction times and enhancing overall user experience. By leveraging predictive analytics and automated payout schedules, SaaS companies can ensure timely and accurate payments, fostering trust and loyalty among their customer base.

3. Boosting Financial Agility with Real-Time Access to Funds:

Cash flow volatility is a common challenge for SaaS companies, impacting their ability to fund growth initiatives and meet operational expenses. By leveraging Instantpay's real-time access to funds, SaaS enterprises can mitigate cash flow fluctuations and maintain financial agility. Whether it's funding marketing campaigns, investing in product development, or managing day-to-day operations, Instantpay provides SaaS companies with the liquidity they need to thrive in a dynamic market environment.

4. Optimising Collections Management with Instantpay's Automated Solutions:

Debt recovery processes can be resource-intensive and time-consuming for SaaS companies, diverting valuable resources away from core business activities. Instantpay's collections management automation streamlines the collections process, reducing manual effort and accelerating cash inflows. By integrating Instantpay's automated reminders and reconciliation workflows, SaaS enterprises can improve collections efficiency, minimise delinquency rates, and enhance overall cash flow management.

Recap of Key Findings

In conclusion, Finance as a Service (FaaS) emerges as a transformative solution for SaaS companies grappling with financial challenges amidst rapid growth and market dynamics. By leveraging specialised expertise, advanced technology, and scalable solutions, FaaS enables companies to streamline SaaS financial management, enhance decision-making, and fuel sustainable growth. From accounting and bookkeeping to financial planning and analysis, FaaS encompasses a comprehensive suite of services tailored to the unique needs of SaaS enterprises. Real-world use cases illustrate the tangible benefits of FaaS in accelerating startup growth, facilitating enterprise expansion, and optimising recurring revenue streams. As the SaaS industry continues to evolve, Finance as a Service stands poised to empower companies on their journey to success.

[rightrev-revenuerecognition]

Navigating Revenue Recognition Complexity

In the realm of revenue recognition, some transactions are straightforward, like retail sales where revenue is recognized upon immediate delivery. However, complexities arise when goods or services are delivered over time, such as subscriptions or bundled products, leading to challenges in determining when and how to recognize revenue.

Adherence to established industry standards, such as Generally Accepted Accounting Principles (GAAP), is crucial for businesses to ensure legal compliance and accurate financial reporting. Proper revenue recognition, guided by principles like ASC 606, not only reflects a company's performance accurately but also fosters transparency and comparability across industries.

Understanding Revenue Recognition: A Crucial Accounting Principle

Revenue recognition GAAP dictates the timing and method of recording revenue in financial statements, emphasizing recognition upon realization and earning, rather than when cash is received.

This principle serves several purposes: it enables CFOs and accounting teams to accurately depict financial performance, ensures transparency and accountability in reporting, fosters consistency and comparability among companies, and enhances trust in financial markets.

Evolution of Revenue Recognition Standards

Historically, revenue recognition standards varied across industries until the introduction of ASC 606 in 2014, which unified the process and shifted towards a more judgment-based approach. This evolution aimed to streamline revenue recognition and align it with GAAP, fostering clearer financial reporting.

Implications of Revenue Recognition on Financial Statements

The ASC 606 framework, in conjunction with GAAP, shapes a company's financial statements by dictating when revenue should be recognized—once performance obligations are met. Adhering to GAAP ensures accurate and consistent reporting, influencing a company's profitability, liquidity, and solvency, thus impacting its valuation and creditworthiness.

Strategic Implications of Revenue Recognition

GAAP's revenue recognition rules inform a company's strategic planning by providing objective performance assessments. Accurate revenue recognition enables informed decision-making in pricing, sales, and marketing strategies, enhancing credibility and reputation in the eyes of investors and creditors.

Core GAAP Principles Supporting Revenue Recognition

Several key GAAP principles underpin revenue recognition, including the realization principle, matching principle, and specific criteria outlined in ASC 606. These principles guide companies in recognizing revenue accurately and consistently, preventing misrepresentation and ensuring compliance.

Industry-Specific Revenue Recognition Guidelines

Revenue recognition practices vary across industries, necessitating tailored approaches. Software, construction, SaaS, eCommerce, and other sectors each have unique considerations for revenue recognition under GAAP, requiring careful assessment of contractual terms and performance obligations.

Navigating Common Revenue Recognition Challenges

Despite standardization efforts, revenue recognition can pose challenges such as timing issues, variable considerations, and complex contractual arrangements. Addressing these challenges requires a systematic approach, accurate estimation of variables, fair value measurements, and robust documentation and communication practices.

Harmonizing GAAP with Revenue Recognition Standards

GAAP complements revenue recognition standards like ASC 606 and IFRS 15, providing essential guidelines for accurate revenue reporting. Automating revenue recognition processes, through services like RightRev, can mitigate complexities and ensure compliance with GAAP, enhancing efficiency and accuracy in financial reporting.

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[upbooks]

Optimizing Payment and Revenue Recognition in Project Management

Optimizing payment and revenue recognition processes in project management is essential for financial stability, accurate reporting, and successful project execution. By streamlining payment workflows, implementing efficient revenue recognition practices, integrating with project management systems, and ensuring compliance, organizations can enhance cash flow, make informed financial decisions, and improve overall project performance. Embracing continuous improvement and staying abreast of industry trends will further contribute to the optimization of payment and revenue recognition processes, driving long-term success in project management.

In the realm of project management, efficient payment and revenue recognition play a crucial role in maintaining financial stability and ensuring project success. By optimizing these processes, organizations can streamline cash flow, accurately track revenue, and make informed financial decisions. In this blog post, we will explore the significance of payment and revenue recognition in project management and provide valuable insights into how to optimize these aspects for maximum efficiency.

1. The Importance of Payment and Revenue Recognition

   Understanding the significance of timely payments and accurate revenue recognition.

   The impact of optimized payment and revenue processes on project profitability and financial health.

   Compliance with accounting standards and regulations in payment and revenue recognition.

2. Streamlining Payment Processes

    Automating payment triggers and workflows to eliminate manual intervention and reduce delays.

    Implementing effective payment tracking systems for enhanced visibility and control.

    Ensuring prompt and accurate invoice generation and delivery to clients.

    Utilizing electronic payment methods for faster and more secure transactions.

3. Efficient Revenue Recognition

 ��  Establishing revenue accounting conditions and principles for accurate recognition.

    Implementing revenue recognition automation tools to eliminate errors and improve efficiency.

    Properly accounting for project milestones, deliverables, and completion percentages.

    Aligning revenue recognition practices with accounting standards (e.g., ASC 606, IFRS 15) to maintain compliance.

4. Integration with Project Management Systems:

    Integrating payment and revenue recognition processes with project management software.

    Leveraging project data to streamline payment and revenue workflows.

    Generating real-time reports and analytics to monitor project financials and performance.

    Facilitating seamless collaboration between finance and project teams for accurate revenue forecasting.

5. Mitigating Risks and Ensuring Compliance:

    Identifying and mitigating potential risks associated with payment and revenue recognition.

    Complying with legal and regulatory requirements to avoid penalties and legal issues.

    Conducting regular audits and reviews to ensure accuracy and integrity in financial reporting.

6. Continuous Improvement and Optimization

    Adopting a culture of continuous improvement in payment and revenue recognition processes.

    Seeking feedback from stakeholders to identify areas for optimization.

    Monitoring industry trends and best practices to stay updated and improve efficiency.

[musiccosmosru]

The channel has been obsessed with compliance efforts around the EU’s General Data Privacy Regulation (GDPR), but there’s another major change coming down the pike. Earlier this year, Financial Accounting Standards Board (FASB) issued ASC 606, the biggest corporate finance compliance change since Sarbanes-Oxley rocked accounting departments nationwide more than 15 years ago. Is your business ready to comply?

ASC 606 is a much-needed, timely overhaul to the way businesses recognize revenue. Current accounting standards were created for a cash-based economy, which has worked well for centuries. But in a digital, subscription-based economy, customers consume and pay for products and services on an as-you-go basis. Because the subscription economy became widespread so quickly, each industry and sector created its own practices around when recurring revenue can be recorded and recognized. Software-as-a-service (SaaS) providers, for instance, played by different rules than a data center renting server real estate.

What Is Revenue Recognition?

Related: GDPR Is Coming: Are You Ready?

When a managed service provider (MSP) makes a sale, it has to be recorded in the company’s financials. But to date, there have been no hard and fast rules around when that revenue is formally recognized in the books, whether it’s upon making the sale, collecting payment or fulfilling the contractual obligation by performing the service or providing the product. With recurring revenue, things get trickier. If an MSP sells a one-year contract to provide services on a monthly basis, does it record that revenue as one lump sum that equals the total sale amount? Does it record it monthly or quarterly? And what if the service package is comprised of several offerings all rolled into one, like desktop as a service, backup and disaster recovery (BDR), or managed firewalls?

Before ASC 606, there was no regulation that spanned industries and business models that answered these questions. This was the challenge the FASB set out to solve with the new regulation, and it’s a massive undertaking for business as a whole and a huge headache for service providers as they work toward becoming compliant by the December deadline.

What It Means for the Channel

Related: The Hidden Opportunities of GDPR

A PwC report predicted that “products and services is expected to be one of the areas most impacted by the new standards.” There are big changes with multiple ramifications in the way MSPs sell and service their offerings.

Currently, elements of a contract can’t be recognized until they are delivered, which results in revenue being formally recorded over the life of the contract. ASC 606 deletes this Vendor Specific Objective Evidence (VSOE) requirement so partners can recognize a much bigger portion of revenue at the initial sale, even if it entails a long-term contract.

How does this play out in practice? That isn’t exactly easy to define. The kicker to ASC 606 is its ambiguity. It’s a judgement-based regulation, not a rules-based one. There’s a lot of room for interpretation, which means there are also opportunities for inadvertent error and deliberate manipulation. Not only is the definition of a contract vague, but so is the actual product or service being sold. If an MSP sells a BDR offering, it might include a threat-management component. If that element isn’t specifically outlined in the contract, the MSP has to make a judgment call if the promised service (BDR) and the implied expectation (threat management) should be recognized separately. If they are, it’s up to the MSP to decide how much revenue to allocate to each service if they’re sold as a bundled package.

The crux of ASC 606 is that it doesn’t only impact a company’s finance team. Every line of business has the potential of being affected.

“We expect to implement all of our changes early in the [fourth quarter], to be compliant with the deadline,” said Tom Clancy, CEO of MSP Valiant Technology. “Hopefully it doesn’t involve much beyond a comp-plan change for our sales teams, and accounting/revenue recognition changes on the back end, but I’ll hesitate to commit to that being the only mechanical changes until [my CPA] tells me it is so.”

Tom Clancy

But the changes, while primarily impacting accounting and business development, have a ripple effect that touches every department. The new regulation, for instance, requires a significantly higher number of reported data points – too many for most companies to keep up with manually – so these organizations will probably need to have some sort of front-end system automation to eliminate silos between departments. MSPs know the value of an enterprise resource planning (ERP) or professional services automation (PSA) system — as well as how painful such an implementation can be to both customer and provider. Partners that don’t yet have such a system or who have customers still operating on disparate platforms should brace themselves for the significant overhaul this kind of automation requires.

On the sales side, contractual language has always been important for revenue recognition, but under ASC 606, the definition of contract includes verbal deals, side agreements or even a pattern of doing business with a client. Finance and sales, therefore, must work closely together to ensure the deals sales are landing are structured in such a way that they comply with the new standard. Clearly, this will have an impact on sales commissions, too. The ramifications are far-reaching.

For partners looking to be acquired, ASC 606 is a huge deal. That’s because it allows for revenue to be recognized when the contracts begin, which can lead to impressive sales figures and deferred revenue, both of which are attractive to investors. But that deferred revenue will be lower and more difficult to forecast, leading to a volatile cash flow. It’s hard to put a valuation number on a company that can’t confidently predict future revenue.

Are Partners Prepared?

The effective date for public companies was annual reporting periods (including interim reporting periods within those periods) beginning after Dec. 15, 2017. Privately held organizations got a little more of a grace period, with a deadline of Dec. 15, 2018. As we saw with GDPR, many partners feel ASC 606, despite the significant changes it will introduce, don’t impact them. Others are just now starting preparations, hoping they’ll be compliant by the Dec. 15 deadline.

Lauchie Johnston, CEO of MSP LMJ Consulting, hasn’t seen an impact on her business or service offerings yet, and “only sees it on the accounting system side for clients.” Holly Dowden of MSP Ntiva says her team is ahead of the ball, explaining that “the changes to ASC 606 don’t materially impact how Ntiva recognizes revenue, due to the way our contracts are structured.” 

But many partners we spoke with freely admit they don’t know what they don’t know, and are leaving the nuts and bolts up to their financial professionals. 

“My accountant…is doing a great job of keeping the intensity in his own lane, and keeping me out of it, until it becomes time to implement policy and legal shifts,” said Clancy. “Generally speaking, this topic has been a bit over my head, which is why I have an accountant, instead of a having a career as an accountant.” 

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The post You Survived GDPR, But Are You Prepared for ASC 606? appeared first on MusicCosmoS.

[lisarprahl]

6 Controllers Share Their Most Pressing Priorities for 2018

Happy New Year! While 2018 officially began for us accounting scribes once the New Year’s Eve hangover faded away, a majority of accounting and finance departments celebrated the start of the new year several months ago.

Many companies’ 2018 fiscal year first quarters began last fall, but the process of planning key accounting and finance priorities, goals, and initiatives for the new year started way before then.

“Typically, after we close out Q2, we’ll start to have a clearer picture of goals we may have set for the second half of the year that are likely to trickle into the following fiscal year,” said Donavon Hall, controller of Apptio, a Bellevue, Wash.-based developer of technology business management SaaS applications. “As a result, we had some preliminary discussions in early Q3 of 2017 about 2018 initiatives, but that picks up in earnest in late Q3 and early Q4.”

I recently spoke to Hall and five other corporate controllers who shed some light into their process for planning 2018 priorities, their No. 1 priority for this fiscal year, and other key initiatives they hope to accomplish:

Name: Donavon Hall

Company: Apptio

Priorities planning process: “Late October and early November is when our finance team meets with every function to summarize budget requests,” he said. “In advance of those meetings, I met with the managers on my team to brainstorm on 2018 initiatives. I then summarized the items discussed during the brainstorming session and reconvened with the management team to prioritize the initiatives we believe we can, and should, tackle in 2018.”

No. 1 priority for 2018: Preparing for ASC 606 adoption. “Much of Q1 will be focused on finishing what we started in 2017 related to the adoption of the new revenue accounting standard,” Hall said. “ASC 606 requires a number of new disclosures and will change the way we account for sales commissions, so we need to build and implement new reports to address the disclosure requirements. We’ll be implementing a new module in our commission software to address the revised accounting for these expenses. In addition, there are a number of new internal controls that we’ll need to implement and test related to ASC 606.”

Other initiatives: Eliminating redundant data entry across multiple systems and improving SOX controls related to provisioning and de-provisioning users in Apptio’s financial-facing systems; and streamlining processes related to the company’s international operations, such as payroll and intercompany settlement.

Name: Mark Harrison, CPA

Company: Cubic Corp., a San Diego-based provider of systems, products, and services to the transportation and defense industries.

Priorities planning process: “We have a series of strategic and business planning meetings with both the CEO and CFO beginning midyear to update our strategic plan, set our priorities for the following year, and prepare for implementation,” he said. “This assures alignment of our priorities with the CEO and CFO. Our fiscal year begins Oct. 1, so we are already nearly through our first quarter.”

No. 1 priority for 2018: Completing implementation of SAP software for remaining businesses. “As part of the company’s strategic plan, we are in our second year of implementing SAP software, which should be transformational for the business,” Harrison said. “We have also begun the implementation of new planning software.”

Other initiatives: Implementing shared services plan; reducing days to close; decreasing cost of finance by finding process efficiencies; and reducing the number of legal entities—simplifying organizational structures.

Name: Jennifer Howard, CPA

Company: InnSight Hotel Management Group, a Springfield, Ore.-based hotel development and management services company.

Priorities planning process: “Our organization is constantly growing, and I feel that our team does a great job in evaluating what our needs are, based on this growth, and implementing a great plan to accomplish it in the most efficient way possible,” she said. “We began to plan for 2018 in August. We discussed the areas of concern that our accounting department currently struggles with and then came up with an approach to tackle them.”

No. 1 priority for 2018: Implementing a job-costing module within the company’s accounting software. “There are three hotels that are currently under construction, and a job-costing module will help give us a better understanding of where each construction project is compared to its budget,” Howard said.

Other initiatives: Automating process for intercompany billing; and improving cash flow forecasting.

Name: Bridget Meacham Kowalski, CPA, CFE

Company: Pittsburgh Symphony Orchestra

Priorities planning process: “Our offices are all within 20 feet of each other, and we rely on real-time communication in order to work. Because of this, priorities and initiatives are discussed on a regular basis, though the effort that goes into them ebbs and flows based on the workflow due to our operations,” she said. “Typically, our priorities don’t need outside approval—anything relating to finance, accounting, and internal controls is our domain. However, this year we’re discussing the complete reworking of a few processes, including the selection and implementation of new software. Those priorities that include major expenditures are discussed with the CFO and CEO if necessary.”

No. 1 priority for 2018: Saving the trees. “My organization has been very slow to embrace the digital age. Everything from timesheets to expense reports to donation documentation to invoices is kept in hard copy. So, I am leading the charge in implementing paperless document retention and workflow solutions,” Kowalski said. “With the time we gain from eliminating inefficiencies, such as copying, filing, and chasing down missing documentation, we can provide more value-added analysis for the organization.”

Other initiatives: Eliminating double entry of data; hiring a new employee; and empowering the PSO’s departments to help themselves.

Name: Robert Ott

Company: TE Connectivity, a Switzerland-based manufacturer of connectivity and sensor products for harsh environments.

Priorities planning process: “Our fiscal year ends on the last Friday of September, and I strive to have strategy, priorities, and goals defined prior to entering the new fiscal year,” he said. “I initiate this process in early summer with my leadership team. We spend a couple days analyzing feedback from our internal customers, along with brainstorming on priorities and goals for the coming year. This conversation leads to a refreshed or refined strategy/vision that guides the entire controlling team.”

No. 1 priority for 2018: Accelerating the utilization of shared services. “Shared services is a centralized organization that is responsible for providing certain finance services to the business,” Ott said. “Efficiency or productivity is achieved through driving consistent processes and leveraging the organization to perform the same or similar services that would have otherwise been provided locally. Further efficiency is often driven through better span of control, economies of scale, and potentially labor arbitrage.”

Other initiatives: Improving and simplifying controllership processes (Lean discipline); successful implementation of ASC 606 and continued preparation for ASC 842 (lease accounting standard); and developing talent to sustain and elevate capabilities.

Name: Craig Vaughan

Company: Sonatype, a Fulton, Md.-based software supply chain automation company.

Priorities planning process: “We have a phenomenal management team and board that understands the initiatives we have to put in place and the timing by which they need to be completed,” he said. “We then utilize that to plan, essentially creating an always-moving project plan—as one project is completed, another is added. Each project is then ranked in terms of priority based on a scoring system that includes effort and assumed return on investment. That scoring relays priorities. As a team, we discuss this pretty regularly given the fast-paced nature of our company’s growth trajectory and evolution.”

No. 1 priority for 2018: Preparing for ASC 606 adoption. “This was a key initiative in 2017 and will continue to be in 2018 until adoption in Q1 of 2019,” Vaughan said. “We’ve been in close discussions with both our auditor and an external firm we hired as consultants to go through the logistics process. We’ve come to some initial conclusions based on our product offerings, selected a software to implement, and finalized our project plan, which we’re kicking off in Q1. We feel we’re going to be more than ready to act on dual reporting, to weed out all the bugs, and to make sure everything looks appropriate, is streamlined, and is set for scale well before the end of 2018.”

Other initiatives: Continued enhancement of the company’s systems and platforms, allowing for more data that can create actionable intelligence in real time for engineering, marketing, and sales.

Image: iStock/Volis61

The post 6 Controllers Share Their Most Pressing Priorities for 2018 appeared first on Going Concern.

from Accounting News http://goingconcern.com/controllers-2018-priorities-inchan/

[ashleydpalmerusa]

6 Controllers Share Their Most Pressing Priorities for 2018

Happy New Year! While 2018 officially began for us accounting scribes once the New Year’s Eve hangover faded away, a majority of accounting and finance departments celebrated the start of the new year several months ago.

Many companies’ 2018 fiscal year first quarters began last fall, but the process of planning key accounting and finance priorities, goals, and initiatives for the new year started way before then.

“Typically, after we close out Q2, we’ll start to have a clearer picture of goals we may have set for the second half of the year that are likely to trickle into the following fiscal year,” said Donavon Hall, controller of Apptio, a Bellevue, Wash.-based developer of technology business management SaaS applications. “As a result, we had some preliminary discussions in early Q3 of 2017 about 2018 initiatives, but that picks up in earnest in late Q3 and early Q4.”

I recently spoke to Hall and five other corporate controllers who shed some light into their process for planning 2018 priorities, their No. 1 priority for this fiscal year, and other key initiatives they hope to accomplish:

Name: Donavon Hall

Company: Apptio

Priorities planning process: “Late October and early November is when our finance team meets with every function to summarize budget requests,” he said. “In advance of those meetings, I met with the managers on my team to brainstorm on 2018 initiatives. I then summarized the items discussed during the brainstorming session and reconvened with the management team to prioritize the initiatives we believe we can, and should, tackle in 2018.”

No. 1 priority for 2018: Preparing for ASC 606 adoption. “Much of Q1 will be focused on finishing what we started in 2017 related to the adoption of the new revenue accounting standard,” Hall said. “ASC 606 requires a number of new disclosures and will change the way we account for sales commissions, so we need to build and implement new reports to address the disclosure requirements. We’ll be implementing a new module in our commission software to address the revised accounting for these expenses. In addition, there are a number of new internal controls that we’ll need to implement and test related to ASC 606.”

Other initiatives: Eliminating redundant data entry across multiple systems and improving SOX controls related to provisioning and de-provisioning users in Apptio’s financial-facing systems; and streamlining processes related to the company’s international operations, such as payroll and intercompany settlement.

Name: Mark Harrison, CPA

Company: Cubic Corp., a San Diego-based provider of systems, products, and services to the transportation and defense industries.

Priorities planning process: “We have a series of strategic and business planning meetings with both the CEO and CFO beginning midyear to update our strategic plan, set our priorities for the following year, and prepare for implementation,” he said. “This assures alignment of our priorities with the CEO and CFO. Our fiscal year begins Oct. 1, so we are already nearly through our first quarter.”

No. 1 priority for 2018: Completing implementation of SAP software for remaining businesses. “As part of the company’s strategic plan, we are in our second year of implementing SAP software, which should be transformational for the business,” Harrison said. “We have also begun the implementation of new planning software.”

Other initiatives: Implementing shared services plan; reducing days to close; decreasing cost of finance by finding process efficiencies; and reducing the number of legal entities—simplifying organizational structures.

Name: Jennifer Howard, CPA

Company: InnSight Hotel Management Group, a Springfield, Ore.-based hotel development and management services company.

Priorities planning process: “Our organization is constantly growing, and I feel that our team does a great job in evaluating what our needs are, based on this growth, and implementing a great plan to accomplish it in the most efficient way possible,” she said. “We began to plan for 2018 in August. We discussed the areas of concern that our accounting department currently struggles with and then came up with an approach to tackle them.”

No. 1 priority for 2018: Implementing a job-costing module within the company’s accounting software. “There are three hotels that are currently under construction, and a job-costing module will help give us a better understanding of where each construction project is compared to its budget,” Howard said.

Other initiatives: Automating process for intercompany billing; and improving cash flow forecasting.

Name: Bridget Meacham Kowalski, CPA, CFE

Company: Pittsburgh Symphony Orchestra

Priorities planning process: “Our offices are all within 20 feet of each other, and we rely on real-time communication in order to work. Because of this, priorities and initiatives are discussed on a regular basis, though the effort that goes into them ebbs and flows based on the workflow due to our operations,” she said. “Typically, our priorities don’t need outside approval—anything relating to finance, accounting, and internal controls is our domain. However, this year we’re discussing the complete reworking of a few processes, including the selection and implementation of new software. Those priorities that include major expenditures are discussed with the CFO and CEO if necessary.”

No. 1 priority for 2018: Saving the trees. “My organization has been very slow to embrace the digital age. Everything from timesheets to expense reports to donation documentation to invoices is kept in hard copy. So, I am leading the charge in implementing paperless document retention and workflow solutions,” Kowalski said. “With the time we gain from eliminating inefficiencies, such as copying, filing, and chasing down missing documentation, we can provide more value-added analysis for the organization.”

Other initiatives: Eliminating double entry of data; hiring a new employee; and empowering the PSO’s departments to help themselves.

Name: Robert Ott

Company: TE Connectivity, a Switzerland-based manufacturer of connectivity and sensor products for harsh environments.

Priorities planning process: “Our fiscal year ends on the last Friday of September, and I strive to have strategy, priorities, and goals defined prior to entering the new fiscal year,” he said. “I initiate this process in early summer with my leadership team. We spend a couple days analyzing feedback from our internal customers, along with brainstorming on priorities and goals for the coming year. This conversation leads to a refreshed or refined strategy/vision that guides the entire controlling team.”

No. 1 priority for 2018: Accelerating the utilization of shared services. “Shared services is a centralized organization that is responsible for providing certain finance services to the business,” Ott said. “Efficiency or productivity is achieved through driving consistent processes and leveraging the organization to perform the same or similar services that would have otherwise been provided locally. Further efficiency is often driven through better span of control, economies of scale, and potentially labor arbitrage.”

Other initiatives: Improving and simplifying controllership processes (Lean discipline); successful implementation of ASC 606 and continued preparation for ASC 842 (lease accounting standard); and developing talent to sustain and elevate capabilities.

Name: Craig Vaughan

Company: Sonatype, a Fulton, Md.-based software supply chain automation company.

Priorities planning process: “We have a phenomenal management team and board that understands the initiatives we have to put in place and the timing by which they need to be completed,” he said. “We then utilize that to plan, essentially creating an always-moving project plan—as one project is completed, another is added. Each project is then ranked in terms of priority based on a scoring system that includes effort and assumed return on investment. That scoring relays priorities. As a team, we discuss this pretty regularly given the fast-paced nature of our company’s growth trajectory and evolution.”

No. 1 priority for 2018: Preparing for ASC 606 adoption. “This was a key initiative in 2017 and will continue to be in 2018 until adoption in Q1 of 2019,” Vaughan said. “We’ve been in close discussions with both our auditor and an external firm we hired as consultants to go through the logistics process. We’ve come to some initial conclusions based on our product offerings, selected a software to implement, and finalized our project plan, which we’re kicking off in Q1. We feel we’re going to be more than ready to act on dual reporting, to weed out all the bugs, and to make sure everything looks appropriate, is streamlined, and is set for scale well before the end of 2018.”

Other initiatives: Continued enhancement of the company’s systems and platforms, allowing for more data that can create actionable intelligence in real time for engineering, marketing, and sales.

Image: iStock/Volis61

The post 6 Controllers Share Their Most Pressing Priorities for 2018 appeared first on Going Concern.

from Accounting News http://goingconcern.com/controllers-2018-priorities-inchan/

[austrisk]

IDG Contributor Network: Can your rev rec software support these complex challenges?

IDG Contributor Network: Can your rev rec software support these complex challenges?

In an earlier post, I discussed many of the key challenges in accounting for revenue under ASC 606. In my last column, I detailed the four key system requirements you should look for in any kind of automated revenue recognition solution. Beyond those basics, any technology solution will also need to have the functionality to handle dual reporting capabilities, provide flexibility for…

[brianlichtig]

IDG Contributor Network: Can your rev rec software support these complex challenges?

In an earlier post, I discussed many of the key challenges in accounting for revenue under ASC 606. In my last column, I detailed the four key system requirements you should look for in any kind of automated revenue recognition solution.

Beyond those basics, any technology solution will also need to have the functionality to handle dual reporting capabilities, provide flexibility for customization of complex revenue streams and to produce essential reporting necessary to comply with the enhanced disclosure requirements under ASC 606.

To read this article in full or to leave a comment, please click here

from CIO https://www.cio.com/article/3227416/leadership-management/can-your-rev-rec-software-support-these-complex-challenges.html#tk.rss_all Baltimore IT Support

[itviconsultants]

IDG Contributor Network: Can your rev rec software support these complex challenges?

In an earlier post, I discussed many of the key challenges in accounting for revenue under ASC 606. In my last column, I detailed the four key system requirements you should look for in any kind of automated revenue recognition solution. Beyond those basics, any technology solution will also need to have the functionality to handle dual reporting capabilities, provide flexibility for customization of complex revenue streams and to produce essential reporting necessary to comply with the enhanced disclosure requirements under ASC 606. To read this article in full or to leave a comment, please click here http://dlvr.it/PpjG9j #CIO #ITStrategy

[musiccosmosru]

The channel has been obsessed with compliance efforts around the EU’s General Data Privacy Regulation (GDPR), but there’s another major change coming down the pike. Earlier this year, Financial Accounting Standards Board (FASB) issued ASC 606, the biggest corporate finance compliance change since Sarbanes-Oxley rocked accounting departments nationwide more than 15 years ago. Is your business ready to comply?

ASC 606 is a much-needed, timely overhaul to the way businesses recognize revenue. Current accounting standards were created for a cash-based economy, which has worked well for centuries. But in a digital, subscription-based economy, customers consume and pay for products and services on an as-you-go basis. Because the subscription economy became widespread so quickly, each industry and sector created its own practices around when recurring revenue can be recorded and recognized. Software-as-a-service (SaaS) providers, for instance, played by different rules than a data center renting server real estate.

What Is Revenue Recognition?

Related: GDPR Is Coming: Are You Ready?

When a managed service provider (MSP) makes a sale, it has to be recorded in the company’s financials. But to date, there have been no hard and fast rules around when that revenue is formally recognized in the books, whether it’s upon making the sale, collecting payment or fulfilling the contractual obligation by performing the service or providing the product. With recurring revenue, things get trickier. If an MSP sells a one-year contract to provide services on a monthly basis, does it record that revenue as one lump sum that equals the total sale amount? Does it record it monthly or quarterly? And what if the service package is comprised of several offerings all rolled into one, like desktop as a service, backup and disaster recovery (BDR), or managed firewalls?

Before ASC 606, there was no regulation that spanned industries and business models that answered these questions. This was the challenge the FASB set out to solve with the new regulation, and it’s a massive undertaking for business as a whole and a huge headache for service providers as they work toward becoming compliant by the December deadline.

What It Means for the Channel

Related: The Hidden Opportunities of GDPR

A PwC report predicted that “products and services is expected to be one of the areas most impacted by the new standards.” There are big changes with multiple ramifications in the way MSPs sell and service their offerings.

Currently, elements of a contract can’t be recognized until they are delivered, which results in revenue being formally recorded over the life of the contract. ASC 606 deletes this Vendor Specific Objective Evidence (VSOE) requirement so partners can recognize a much bigger portion of revenue at the initial sale, even if it entails a long-term contract.

How does this play out in practice? That isn’t exactly easy to define. The kicker to ASC 606 is its ambiguity. It’s a judgement-based regulation, not a rules-based one. There’s a lot of room for interpretation, which means there are also opportunities for inadvertent error and deliberate manipulation. Not only is the definition of a contract vague, but so is the actual product or service being sold. If an MSP sells a BDR offering, it might include a threat-management component. If that element isn’t specifically outlined in the contract, the MSP has to make a judgment call if the promised service (BDR) and the implied expectation (threat management) should be recognized separately. If they are, it’s up to the MSP to decide how much revenue to allocate to each service if they’re sold as a bundled package.

The crux of ASC 606 is that it doesn’t only impact a company’s finance team. Every line of business has the potential of being affected.

“We expect to implement all of our changes early in the [fourth quarter], to be compliant with the deadline,” said Tom Clancy, CEO of MSP Valiant Technology. “Hopefully it doesn’t involve much beyond a comp-plan change for our sales teams, and accounting/revenue recognition changes on the back end, but I’ll hesitate to commit to that being the only mechanical changes until [my CPA] tells me it is so.”

Tom Clancy

But the changes, while primarily impacting accounting and business development, have a ripple effect that touches every department. The new regulation, for instance, requires a significantly higher number of reported data points – too many for most companies to keep up with manually – so these organizations will probably need to have some sort of front-end system automation to eliminate silos between departments. MSPs know the value of an enterprise resource planning (ERP) or professional services automation (PSA) system — as well as how painful such an implementation can be to both customer and provider. Partners that don’t yet have such a system or who have customers still operating on disparate platforms should brace themselves for the significant overhaul this kind of automation requires.

On the sales side, contractual language has always been important for revenue recognition, but under ASC 606, the definition of contract includes verbal deals, side agreements or even a pattern of doing business with a client. Finance and sales, therefore, must work closely together to ensure the deals sales are landing are structured in such a way that they comply with the new standard. Clearly, this will have an impact on sales commissions, too. The ramifications are far-reaching.

For partners looking to be acquired, ASC 606 is a huge deal. That’s because it allows for revenue to be recognized when the contracts begin, which can lead to impressive sales figures and deferred revenue, both of which are attractive to investors. But that deferred revenue will be lower and more difficult to forecast, leading to a volatile cash flow. It’s hard to put a valuation number on a company that can’t confidently predict future revenue.

Are Partners Prepared?

The effective date for public companies was annual reporting periods (including interim reporting periods within those periods) beginning after Dec. 15, 2017. Privately held organizations got a little more of a grace period, with a deadline of Dec. 15, 2018. As we saw with GDPR, many partners feel ASC 606, despite the significant changes it will introduce, don’t impact them. Others are just now starting preparations, hoping they’ll be compliant by the Dec. 15 deadline.

Lauchie Johnston, CEO of MSP LMJ Consulting, hasn’t seen an impact on her business or service offerings yet, and “only sees it on the accounting system side for clients.” Holly Dowden of MSP Ntiva says her team is ahead of the ball, explaining that “the changes to ASC 606 don’t materially impact how Ntiva recognizes revenue, due to the way our contracts are structured.” 

But many partners we spoke with freely admit they don’t know what they don’t know, and are leaving the nuts and bolts up to their financial professionals. 

“My accountant…is doing a great job of keeping the intensity in his own lane, and keeping me out of it, until it becomes time to implement policy and legal shifts,” said Clancy. “Generally speaking, this topic has been a bit over my head, which is why I have an accountant, instead of a having a career as an accountant.” 

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