Intacct, a cloud-based ERP vendor focused on midsize companies, recently held its annual user group meeting. Two of its products that were covered in the keynote are worth noting. One, already available, enables companies to manage their order-to-cash process in a continuous fashion, from the time a salesperson begins to engage with a prospect to the time funds are collected. The other is a custom report writer, to be available in the first quarter of 2017, that will provide business users with the ability to create even complex reports from any data that resides within Intacct in a straightforward, interactive fashion that is similar to building reports in a desktop spreadsheet. The company also presented modules that will facilitate compliance with the new revenue recognition standards.
Companies that offer their products or services through a subscription can find themselves challenged. Unless the subscription is a single item and is never adjusted (for example, a magazine subscription), keeping track of the items covered by the contract and its terms and conditions and billing for them accurately can be time-consuming because the relevant information often is scattered across multiple applications. Often, customers make adjustments to their services during their subscription period: the add or reduce the number of users or the type or amount of services. When changes take place, the adjustments may not be recorded in all applications at the same time or consistently. Since desktop spreadsheets are the most common way companies bring together the information needed to create their subscription invoices, those that want to be certain that their billing is accurate will always need to perform checks and reconciliations, which is also time-consuming.
Our benchmark research on recurring revenue businesses finds that only 29 percent of those in accounting roles are satisfied with their process for invoicing and billing. The issues that accounting departments face here are likely to be underappreciated by the rest of the company – the same research shows that nearly half (47%) of participants working outside of finance and accounting said they are satisfied. The gulf between the two groups reflects the reality that when parts of a business process are performed without regard to their impact on finance department operations, invoicing becomes a highly labor-intensive effort. Indeed, of those not satisfied with their invoicing, four out of five (79%) said it requires too much work, two-thirds (68%) said it involves too many resources, and more than half (54%) said it takes too long.
Intacct’s Contract Billing for CRM addresses these issues by enabling companies to maintain data integrity over the entire sell-to-collect process, from the time a salesperson engages with a prospect through collection. Doing so eliminates the possibility that billing mistakes will occur because of discrepancies between data sources caused by inaccurate rekeying of data or inconsistencies between data sources that can occur because changes to the subscription are not recorded in all systems at the same time. Contract Billing for CRM has native, built-in connectivity between Intacct and Salesforce CRM applications, which creates a continuous workflow from the start of the sales process in Salesforce to billing and collection with Intacct. Throughout the process, the system maintains a single authoritative source of data.
Being able to manage a process and associated data from end to end is one of the pillars of an approach to managing finance departments that we call continuous accounting. This approach uses information technology to increase the efficiency of the department while enabling it to play a more strategic role in company operations. In this case, Contract Billing gives sales and marketing organizations greater flexibility in designing service offerings and related terms and conditions to meet market demands because the system can do so without increasing accounting department workloads.
As a result of imminent changes to accounting standards, which I have discussed (ASC 606 in the United States and IFRS 15 in most of the rest of the world), companies that do business through contracts – whether for a single transaction or a subscription – will find accounting for them more complicated beginning in 2017. As I’ve noted, whether it’s a one-off deal or an ongoing subscription, managing sales contracts on an end-to-end basis can greatly simplify accounting for contracts and substantially reduce the chance of errors occurring.
Also featured in the keynote was the custom report writer, which is due to be generally available in the first quarter of 2017. Although it isn’t as easy to use as a spreadsheet, it appears to require only a modest amount of training and a bit of experience for a business user to become productive. As a result, the trade-off between some up-front effort to save a considerable amount of time on an ongoing basis seems worthwhile. The experience is rather spreadsheet-like in that it enables business users to create and format a report on a “design canvas” in an interactive fashion. Starting with a basic report, users can keep adding details in a preview mode (such as fields or dimensions such as sales territories or product families) and immediately see the results of the modifications, which is similar to what they experience in using a desktop spreadsheet. Business users also can quickly modify the report whenever conditions require changes. Creating periodic reports using this tool can save a considerable number of hours every week month or quarter compared to creating them in a desktop spreadsheet.
Moreover, a report created in the custom report writer will be able to access any data that’s in Intacct. This includes not only accounting data but also data stored in what the company calls “custom objects.” These objects could contain any sort of information that wouldn’t necessarily be recorded in an accounting transaction but would be useful in creating company reports or analyses. A custom object might, for example, be a list of the company’s owned or leased facilities, their size and location, rent or mortgage payments, taxes and any other information that individuals with a facilities management role might maintain in a desktop spreadsheet. Intacct makes it straightforward to import the data from such a spreadsheet directly into a database table named Facilities. The facilities management group can then easily access and update this information as needed. Keeping scattered company information in Intacct rather than in spreadsheets makes the data more accessible and secure for everyone in the organization. And once it’s available in Intacct, companies will find it much easier to analyze and report on a combination of financial and other types of information.
I recommend that midsize companies that are considering changing their ERP system, especially those that have a subscription or recurring revenue business model, evaluate Intacct. Larger companies that have use a subscription business model for part of their revenues also should consider using Intacct as a sort of subledger to manage the accounting for this part of their business since it could save them a considerable amount of effort in accounting as well as provide greater flexibility in creating products or offerings.
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