Robert Kugel's Analyst Perspectives

Revenue Recognition Standards Pose Planning Challenges

Posted by Robert Kugel on Feb 18, 2019 6:00:00 AM

New rules governing revenue recognition for contracts have gone into effect for larger companies and are about to go into effect for smaller ones. The Financial Accounting Standards Board (FASB), which administers Generally Accepted Accounting Principles in the U.S. (US-GAAP), has issued ASC 606 and the International Accounting Standards Board (IASB), which administers International Financial Reporting Standards (IFRS) used in most other countries, has issued IFRS 15. The two standards are very similar and will require fundamental changes in revenue recognition for companies that use even moderately complex contracts in their dealings with customers. These include, for example, contracts that are structured using tiered pricing or volume discounts or ones that routinely involve modifications, such as subscriptions that add or drop users and services or allow seasonal changes or promotional discounts.

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Topics: Office of Finance, Recurring Revenue, Continuous Planning, Sales Performance Management, Financial Performance Management, ERP and Continuous Accounting, Sales Planning and Analytics, Billing and Recurring Revenue, revenue recognition

Straight-Through Processing for Business and Commerce

Posted by Robert Kugel on Jan 31, 2019 6:00:00 AM

“Straight-through processing” (STP) is a business process and data architecture methodology. Technology advances have made STP increasingly feasible for any business process, allowing companies to design and execute them from inception to completion in a more automated fashion, minimizing or eliminating human intervention in the process. The associated data also progresses automatically end-to-end through the process, preserving its integrity. Because there is no human intervention, data is more accurate and less prone to manipulation.

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Topics: Sales, Customer Experience, Office of Finance, Recurring Revenue, Data Governance, Financial Performance Management, Digital Commerce, ERP and Continuous Accounting, Billing and Recurring Revenue

BlackLine Exorcises Accounting Details

Posted by Robert Kugel on Jan 10, 2019 6:00:00 AM

I recently attended BlackLine’s annual user conference. The company aims to automate time-consuming repetitive tasks and substantially reduce the amount of detail that individuals must handle in the department. The phrase “the devil is in the details” certainly applies to accounting, especially managing the details in the close-to-report phase of the accounting cycle, which is where BlackLine plays its role. This phase spans from all the pre-close activities to the publication of the financial statements. The non-practitioner is likely unaware of the hair-curling amount of essential detail that the finance and accounting organization must handle in the close-to-report. Beyond its toll on efficiency, the time and attention involved in performing this work manually bedevils departments’ attempts to become a more strategic partner to the rest of the business.

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Topics: automation, close, closing, Consolidation, control, effectiveness, Reconciliation, CFO, compliance, Data, controller, Financial Performance Management, FPM, Sarbanes Oxley, Accounting, reconcile

Wdata Puts the “A” back in FP&A

Posted by Robert Kugel on Dec 13, 2018 6:00:00 AM

Workiva recently introduced Wdata, a cloud facility for centralizing financial and non-financial information from multiple sources. It frees up time for finance organizations, especially financial planning and analysis (FP&A) groups, to explore conditions and trends in their business because they need to spend less of it gathering data and preparing it for analysis and reporting. Ventana Research recently awarded Workiva our Digital Innovation award for Wdata because of its transformative potential.

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Topics: Office of Finance, Recurring Revenue, Continuous Planning, Data Governance, Data Preparation, Financial Performance Management, Price and Revenue Management, Enterprise Resource Planning, ERP and Continuous Accounting, Sales Planning and Analytics, revenue recognition

FinancialForce Serves the Modern Service Business

Posted by Robert Kugel on Dec 10, 2018 6:00:00 AM

FinancialForce offers cloud-based ERP and professional services automation (PSA) software. The company targets midsize and larger services companies, especially those that provide professional services (such as consultants or field service organizations), subscription-based or recurring revenue services. FinancialForce’s key point of differentiation is that it is built natively on the Salesforce platform. Thus, CRM data is already located on the same platform as accounting and back-office data so organizations can orchestrate end-to-end front-office to back-office processes without having to integrate different systems.

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Topics: Sales, Office of Finance, Recurring Revenue, Cloud Computing, Financial Performance Management, ERP and Continuous Accounting, Billing and Recurring Revenue, revenue recognition

Kinaxis Assists in the Planning of Supply Chains for the New Era of Trade

Posted by Robert Kugel on Dec 6, 2018 6:00:00 AM

Kinaxis recently held its annual user conference, Kinexions, which focuses on helping the company’s customers improve their execution of supply chain and sales and operations planning (S&OP). This year’s event took place against a backdrop of what is beginning to look like a new and more challenging era of world trade. This will have a significant impact on most product companies with international operations. (I also reviewed last year’s event, which can be found here.)

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Topics: Continuous Planning, Financial Performance Management, Inventory Optimization, Operations & Supply Chain, Enterprise Resource Planning, Sales and Operations Planning

Workday Supports the Finance Department of the Future

Posted by Robert Kugel on Nov 29, 2018 6:00:00 AM

This year’s Workday Rising, the company’s annual user group meeting, offered details of the company’s latest release, Workday 31, and provided a roadmap for the next several semiannual releases. To put these plans into a broader context, I’ve commented before that information technology is on the verge of delivering capabilities that will enable finance and accounting organizations to transform how they work. Technology will have a more profound impact on accounting and finance over the coming decade than it has over the past 50 years. Workday Financial Management, along with the company’s Prism Analytics and recently acquired Adaptive Insights, is evolving to provide to finance and accounting departments the technology underpinnings that can help them redefine how they do their work.

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Topics: Office of Finance, Recurring Revenue, Continuous Planning, Financial Performance Management, Price and Revenue Management, ERP and Continuous Accounting, revenue recognition

Sales and Operations Planning: Just Mediocre

Posted by Robert Kugel on Nov 15, 2018 6:00:00 AM

A recent analysis of our sales and operations planning (S&OP) dynamic insight research provides perspective on the current state of this core business process. Using concise web-based surveys, Ventana Research’s Dynamic Insights provide research participants with an immediate assessment of their company’s efforts as well as research- and experience-based advice on potential next steps to improve. For those who wish to do a quick assessment of their own company’s sales and operations planning, the Dynamic Insight can be found here.

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Topics: Continuous Planning, Product Information Management, Inventory Optimization, Work and Resource Management, Operations & Supply Chain, Enterprise Resource Planning, Sales and Operations Planning, Sales Planning and Analytics

Real Estate Isn’t Just a Fixed Cost

Posted by Robert Kugel on Oct 12, 2018 6:00:00 AM

Financial analysts typically classify real estate as a fixed cost. Strictly speaking, that’s correct, but looking at it this way leads many organizations to overlook opportunities to more carefully manage their real estate and other occupancy expenses. The changes in lease accounting that are going into effect have caused some organizations to reexamine their leasing policies and how they organize their lease accounting processes. They should take an even broader approach and consider ways to improve how they manage those leases.

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Topics: Office of Finance, Continuous Planning, Financial Performance Management, Operations & Supply Chain, ERP and Continuous Accounting, Accounting, Lease Accounting, ASC842, IFRS16

PROS Enables Modern Commerce with Dynamic CPQ

Posted by Robert Kugel on Sep 16, 2018 11:29:47 PM

PROS Holdings is a software vendor with two distinct but related sets of products. The company began in 1985 offering revenue management software to airlines, hospitality and rental car companies. More recently it added price and revenue management software focusing on B2B services, chemicals and energy, consumer goods manufacturers, food and beverage, healthcare, insurance and technology. This note focuses on the B2B portion of the business.

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Topics: Big Data, Sales, Customer Experience, Marketing, Office of Finance, Analytics, Data Preparation, Sales Performance Management, Financial Performance Management, Price and Revenue Management, Digital Marketing, Digital Commerce, Pricing and Promotion Management, Sales Enablement and Execution