Zuora Launches Z-Finance, the World’s First Finance Application Built for the Subscription Economy

September 17, 2012

Z-Finance relieves the pain finance departments are feeling as they increasingly realize that traditional accounting systems fail to meet the needs of subscription businesses

Redwood City, CA – September 17, 2012


  • Zuora, the subscription commerce, billing and finance leader, today launched Z-Finance, the first financial application specifically designed for enterprises in the Subscription Economy.
  • The shift to the Subscription Economy is wreaking havoc on finance departments that live by the rules of double-entry bookkeeping, first defined over 500 years ago. All accounting systems in existence today were built around the rules of double-entry bookkeeping. These rules are inadequate for capturing the dynamic, ongoing revenue relationships that are the foundation for the subscription business model.
  • Z-Finance is built around a new financial framework that Subscription Businesses need, a framework that is missing from centuries-old accounting rules. Z-Finance complements popular accounting solutions, including FinancialForce Accounting, Intacct, NetSuite, Oracle, Sage, SAP, QuickBooks, and Workday.
  • Over the last four years, Zuora has built the de-facto billing and commerce backbone for the Subscription Economy. With today’s introduction of Z-Finance combined with Z-Billing and Z-Commerce, Zuora has now delivered Z-Business, the first Relationship Business Management  (RBM) solution.

Traditional Finance Breaks Down in the Subscription Economy

  • For the last 500 years, double-entry bookkeeping has been the cornerstone of finance.  But the advent of the Subscription Economy has brought with it new business models, and revealed the limitations of this centuries-old system:
    • Subscription businesses need to treat recurring revenue and expenses differently from one-time revenue and expenses.
    • Subscription businesses need to track bookings, billings, cash and revenue across multiple dimensions of time.
    • Subscription businesses need to manage complex changes that create chaos in downstream processes, such as mid-month subscription cancellations that result in credits or refunds and have an impact on revenue recognition.
  • The limitations of traditional bookkeeping is causing significant pain for subscription businesses:
    • Accounting teams struggle to close month-end books on time.
    • Revenue managers are drowning in spreadsheets.
    • CFOs are forced to maintain one set of GAAP books to please auditors and another to run their business.
    • CMOs are prevented from implementing new packaging and pricing because of the burden it places on the finance team.
    • CEOs are having a hard time explaining their success to Wall Street.
  • Subscription businesses are faced with the crushing burden of translating the language of subscriptions into the traditional bookkeeping system, unless they have a new system designed to meet the unique financial requirements of the Subscription Economy.

Z-Finance: The New Financial System of Record for Subscription Economy CFOs

  • Z-Finance is built on a framework that addresses the shortcomings of traditional accounting methods. This framework contains:
    • Multi-dimensional ledgers that spread amounts over multiple time periods, instead of ledgers that restrict you to simple debits and credits;
    • Intelligent algorithms that know how to differentiate between the treatment of one- time and recurring amounts, instead of lumping them together;
    • A revolutionary data model that inherently calculates key subscription metrics like ARR and TCV; and
    • A powerful rules engine that adapts to subscription changes as they happen, and re-calculates any schedules impacted by those changes.
  • Z-Finance contains the following features:
  • Accounting Close which includes the ability to:
    • define and manage your accounting periods;
    • run a trial balance to summarize your billing, cash and revenue data;
    • automatically uncover any transactions still pending for the period; and
    • lock down your accounting periods to prevent changes.
  • Revenue Recognition Management which includes the ability to:
    • define rules to manage complex revenue recognition processes;
    • tag charges with revenue recognition rules;
    • tag charges with earned and deferred revenue accounts;
    • control revenue recognition trigger dates; and
    • automatically generate earned and deferred revenue schedules.
  • Summary journal entries which includes the ability to:
    • automatically generate debit and credit journal entries for billings, cash and revenue, and
    • align journal entries with your chart of accounts.
  • Role based security which includes the ability to:
    • grant granular user permissions, and
    • control user actions on sensitive financial data.
  • Z-Finance enables subscription businesses to track real-time details on recurring revenue, billings and cash, and have a complete financial picture of their subscription business operations including key forward-looking metrics like ARR, Churn, ACV and more. Z-Finance delivers the following key benefits:
    • Tame complex revenue recognition processes: manage revenue recognition processes, no matter how complex the pricing monetization strategies may be.
    • Close with confidence: accelerate closings – monthly, quarterly, 4-4-5 or other cadences – by easily running trial balances, reviewing totals, making adjustments/ corrections, and closing to lock down transactions.
    • Enable new business strategies: liberate business owners to pursue growth strategies without burdening finance.
    • Audit peace of mind:  rapidly review details for any transaction from closed accounting periods.
    • Real-time visibility into critical subscription metrics:  review forward-looking subscription metrics that are essential to running and measuring the performance of subscription business.

Subscription Executives Cheer Z-Finance

  • “We use SAP and run our new broadband subscription business on Zuora. As a subscription business, we were concerned that it would take us weeks to manage our month-end close process. With Z-Finance, we can easily generate the journal entries we need for our back end SAP ERP implementation in days, without time-consuming and expensive customization.   That is a tremendous advantage,” said Vignesa Moorthy, CEO of ViewQwest, the fourth largest telco in Singapore.
  • “We have a hosting business with complex multi-currency, usage-based subscription billing, international operations, and complicated tax and audit requirements. We were one of the first companies on Z-Billing and then Zuora delivered for us even more with Z-Commerce. And
    now they have nailed it with Z-Finance, providing the next level of audit-friendly automation and enabling us to dramatically accelerate our month-end close process,” said Bruce MacFadyen, COO of FireHost.
  • “Z-Finance is a breakthrough for financial professionals who are struggling with the significant changes that come with managing a subscription revenue model. Z-Finance makes it easier to create and review complete audit trails, and aligns smoothly with the way we do business. As an early pioneer developing a leading edge, software-as-a-service business, we believe Zuora’s cloud platform provides greater flexibility, faster implementation and makes it easier for us to scale as our business grows,” said Vince Zumbo, CFO of Autotask.

Zuora and Industry Commentary

  • “Z-Finance is the finance solution for the 21st century services-based world,” said Tien Tzuo, CEO, Zuora. “As more companies shift to the massive Subscription Economy opportunity, the era of ERP is coming to an end. Z-Finance provides that financial bridge companies need to move beyond the limitations of ERP, and grow, optimize and measure their subscription businesses.”
  • “In many of today’s subscription businesses, finance and accounting teams are struggling to close month-end books on time, and are forced to use spreadsheets to track revenues.  Traditional accounting systems aren’t agile enough to adapt to the demands of this business model,” said Amy Konary, Research Vice President, Software Licensing, Provisioning and Delivery at IDC.  “Z-Finance is a step forward in addressing these problems, and is designed to bring accounting teams into the modern era of subscriptions.”

About Zuora, Inc.

Zuora is the global leader in Relationship Business Management solutions. Zuora delivers the subscription billing, commerce and finance capabilities that have become the industry standard to help companies transition to the Subscription Economy. Enterprises and emerging companies alike use Zuora’s multi-tenant cloud solution to enable growth strategies, to streamline key processes and to provide visibility into the metrics that matter most in the Subscription Economy. Zuora services innovative customers like Informatica, Tata Communications, Box.net, DocuSign, Xplornet, Ustream and Reed Business Information. To learn more about Zuora, please visit zuorainternprd.wpengine.com.

Media Contact:

Maria Bradley
Reidy Communications for Zuora
(415) 509-0498