Revenue Directors across companies and across industries are struggling with the complexity of revenue recognition. Here we tell the story of a real-life Director of Revenue who was faced with the challenge of finding the best revenue recognition tool for his company — and building a business case to implement.
Meet the hero of our story, Vincent, a revenue director with rich experience leading companies through the IPO process.
The Company: Fast-Growing, Pre-IPO
At the time Vincent was hired, the company was fast-growing, pre-IPO, and doing about $500M in annual revenue. They had one subscription revenue stream and were exploring options to add more down the line, some which would be consumption-based and some revenue that would come from partners and resellers. Exploring new pathways of revenue meant more and more change was on the way, with every change and new charge model adding a new level of complexity.
The Power of Revenue Automation
Vincent realized that adding new charge models would significantly add complexity to the existing systems used for revenue recognition. And he wanted to ensure that nothing got in the way of the company’s growth and progress.
He was considering the evaluation of event-based release of revenue and was also fully aware of contract modifications and the effect of bundling.
Vincent knew for sure that he didn’t want all of this to be done manually. He firmly believed in the power of revenue automation and how it could ensure his new processes were accurate, timely, and compliant.
Roadblocks on the freeway to Automation
Vincent had recently spent six months evaluating revenue automation options at his previous workplace, so he had a fair understanding of what was available. The challenges he mentioned while implementing revenue recognition solution at his previous company were:
- Potential for lack of compliance with ASC 606 guidelines
- Manually recalculating revenue associated with contract changes
- Properly accounting for bundles of products and services
- Determining stand-alone selling price (SSP)
- Grouping transactions into a single revenue contract
It was going to be critical to provide the management and board of directors with real-time visibility into revenue numbers, especially since they were preparing for their IPO.
The Dream Solution
Vincent put in days and weeks to study the needs of similar SaaS companies and put together a summary of what his “dream solution” should have, which included the ability to:
- Automate contract changes and updates to revenue schedules
- Handle SSP analysis and allocation
- Manage revenue policies with flexibility for pricing/contract changes
- Capitalize revenue-related costs appropriately
- Provide full reporting and forecasting functionality
RevPro to the Rescue
After evaluating the options, Vincent made an informed choice to employ Zuora RevPro to handle revenue automation at his company. A wise choice that helped him lead the company through a successful IPO and has subsequently helped the company:
- Improve accounting accuracy and speed of audits
- Maintain compliance with all U.S. GAAP instructions and minimize risk of non-compliance
- Reduce costs and improve efficiency
- Accelerate growth through diversification of revenue streams
- Have visibility into all data required for disclosure reporting as a public company
Vincent worked very closely with the auditor during the implementation of RevPro and through the IPO process to ensure that all stakeholders were comfortable with the policies, procedures, and systems being put into place.
To learn more about Vincent and read two other real stories of revenue automation, download our ebook: A Tale of Three Cities: Life After Revenue Automation.