Binary Stream - SB for D365 Finance and Operations
- 1. Subscription Billing for Dynamics D365/AX Neil MacDonald CPA CMA Solutions Consultant Binary Stream www.binarystream.com
- 2. Introduction Neil MacDonald CPA, CMA, PMP • 30+ years progressive Business, Project and IT Management, formal management and financial training, technical and industry certifications • Project management and technical leadership in the delivery of IT and ERP implementations • Resolution and consulting skills in applying best practices and efficiency initiatives Career History: Solutions Consultant 2011 – Present Dynamics GP Consultant 2007 – 2011 Mgr. IT and Process Improvements 1993 – 2007 Education: • CPA (Chartered Professional Accountant) • CMA (Certified Management Accountant) • PMP (Project Management Professional) • MCSE (Microsoft Certified System Engineer) • MCBMSP (Microsoft Certified Business Management Solutions Professional)
- 3. Business Goals Challenges Benefits Live ExampleCapabilities Q & A Agenda
- 4. Business Goals - Billing • Increase ROI – Do more with less tools/people • Make better decisions • Identify and eliminate waste / inefficiency • Reduce quote to cash time • Ensure GAAP compliance • Faster access to the right data at the right time • Fewer repetitive tasks • Reduce data entry errors
- 5. Business Goals – Rev Rec • Comply with revenue recognition standards • Accurate and prompt information • Create accurate forecasts / reports • Complete control over when recognition entries are posted • Satisfy audit requirements with reduced effort • Minimize reconciliation at month-end • Eliminate effort required to create recognition schedules
- 6. Challenges • Complex billing and revenue recognition schedules • Multiple pricing models • Revenue / expense recognition schedules in Excel • Evolving accounting standards • Multiple non-integrated systems for quote to cash
- 7. Capabilities • Produce real time sales analysis • Forecast future revenue streams • Eliminate manual rekeying of data and redundant processes • Produce invoices / financial reports in a timely manner • Integrate contract management and billing system with ERP • Create evergreen renewal schedules • Guidance for GAAP compliance • Modify a schedule at any time • Record revenue in the period in which it’s earned • Manage deferral process within existing accounting system
- 8. Benefits • Reduce quote to cash cycle time • Reduced cost of maintaining multiple systems • Reduced data entry expense • No revenue “leakage” due to missed renewals • Minimize audit expenses • Avoid non-compliance penalties • Goodwill & other intangibles
- 10. • Create a deferral line for each deferred item • Reconcile it each month, looking for changes, updates, adding new lines, deleting retired lines • Create a manual JE each month • Manage events/milestones manually • Now imagine you have 10’s of thousands of contracts, with 5 to 10 lines each! • Add ASC 606 complexity on top of that! Deferrals in Excel Month 1 Month 2 Month 3 Month 4 … Setup Fee $5,00024 mos. 208.33 208.33 208.33 208.33 … Service Contract $12,00012 mos. 1,000.00 1,000.00 1,000.00 1,000.00 … Pro Services $3,000Event ? ? ? ? Month 1 - Recognize revenue Deferred Revenue 1,208.33 Revenue 1,208.33
- 11. Initial Contract: Item Ext. Price Type Contract Value SSP Contract SSP Reallocated Contract Revenue Period Revenue HW 15,000.00 One time 15,000.00 17,000.00 17,000.00 15,095.44 15,095.44 Setup Fee 5,000.00 One time 5,000.00 5,000.00 5,000.00 4,439.83 4,439.83 SAAS SW 7,000.00 Monthly 168,000.00 8,000.00 192,000.00 170,489.63 7,103.73 SW Annual Maint. 12,000.00 Def. 12 mo 24,000.00 12,000.00 24,000.00 21,311.20 10,655.60 Prof Services 3,000.00 Def event based 3,000.00 3,000.00 3,000.00 2,663.90 2,663.90 Discount - 1,000.00 - 1,000.00 - - - 41,000.00 214,000.00 45,000.00 241,000.00 214,000.00 39,958.50 Remember the formula: (Item SSP / Sum of SSPs) * Contract Value Example: SAAS SW: (192,000 / 241,000) * 214,000 = 170,489.63 Jan 2016 Invoice: Item Ext Price Revenue Distribution HW 15,000.00 15,095.44 AR 41,000.00 Setup Fee 5,000.00 4,439.83 Sales HW 15,095.44 SAAS SW 7,000.00 7,103.73 Sales Setup 4,439.83 SW Annual Maint. 12,000.00 10,655.60 Sales SW 7,103.73 Prof Services 3,000.00 2,663.90 Deferred Rev Maint 10,655.60 Discount - 1,000.00 - Sales Prof Serv 2,663.90 41,000.00 39,958.50 Contr.Rev.Clearing 1,041.50 41,000.00 41,000.00 ASC 606 Example – Using Excel
- 12. A recent report from the EU found over 50% of all critical spreadsheets in large organizations contained “material defects”! http://www.eusprig.org/basic-research.htm - European Spreadsheet Risks Interest Group
- 13. Thank you! Any Questions? If you have any questions, please contact your Binary Stream Account Manager or call 604-522-6300 sales@binarystream.com