TEN REVPRO IMPLEMENTATION TAKEAWAYS. Presented By: Adityavikram Toshniwal Sondi Kri

Transcription

1 TEN REVPRO IMPLEMENTATION TAKEAWAYS Presented By: Adityavikram Toshniwal Sondi Kri

2 TAKEAWAYS Revenue Recognition for Extended Warranty Netting Process Milestone Billing without SO Linkage Conditional Allocation Revenue Recognition for Early Renewals RC Grouping - Time & Amount Apply Cost based on Flex SO modification System Calculated List Price Revenue Acceleration

3 Revenue Recognition for Extended Warranty Requirement Extended warranty brought through bundle explosion of Hardware Line. Revenue for extended warranty to be booked only after expiry of the initial warranty period. Way Out Ratable Method Condensed POB Satisfaction Manual POB Expiry Contract Start Date + 365

4 Setup

5 RevPro is to Automate Revenue Accounting in all scenarios

6 Netting Process Why? Implication? Unbilled Account and Deferred Account At the end of the reporting period replaced with Contract Liability Contract Liability Account for unbilled Account in ASC 606. revenue will be reclassified as Contract Asset Account Contract Liability should be settled at the end of the reporting period. On opening of the next period, the reclassification entry for unbilled Better presentation of accounts. revenue will be reversed. Compliance with ASC 606 Guidelines Number of entries passed to GL gets reduced drastically.

7 Milestone Billing without SO Linkage Business Case Configuration Challenge Entity provides a series of distinct goods and services, thus forming Single invoice line cannot be linked to multiple sales order lines. different POBs. Where an invoice is brought with Single invoice was released against a contract with multiple POBs. blank sales order line id reference, system will generate a SO on its own.

8 Arrangement View Solution for Original Line Solution to ensure single effect Solution for multiple Invoices

9 Implementation requires thinking out of the Box.

10 Conditional Allocation Requirement Allocation is to be done only when the discount offered is greater that 20% Configuration SSP Formula Based Calculation. Setup of Ceiling and Floor Percentage 0% and 20% respectively. SSP Range setup while defining SSP Hierarchy in RC Grouping Rule: a. SP Within Range Selling Price. b. SP Above Range Selling Price c. SP Below Range Mid Point

11 Revenue Recognition for Early Renewals Entity sold one Data Augmentation: year subscription. 1. Revenue start date Renewal of subscription was entered into before the expiry of the earlier one. Revenue for the renewal to be booked after expiry of the earlier subscription and equally over the tenure of the type of subscription. = Expiry Date Duration will be stamped as per the type of subscription from the predefined list.

12 RC Grouping - Time & Amount Requirement RC Grouping based on the following criterions Sr. No. Field Used Days / Amount Criteria 1 Product Family and Customer Number Same RC if within 90 Days. 2 High Value Transaction For amount over $35,000

13 RC Grouping Rule

14 Data Augmentation Rule 1

15 Data Augmentation Rule 2

16 Apply Commission based on Flex Requirements Commission is a predefined percentage of Annual Contract Value brought from the source system. Commission Cost to be applied on the parent and the child line created after the bundle explosion. Design Challenge Bundle only splits the Selling Price, List Price and Cost Price. Stratification for cost is based on the salesperson and various other records, thus the cost formula cannot be directly linked to the products. Solution The split percentage will be brought during bundle explosion on the child lines using a flex number field. Data augmentation to update Annual Contract Value by multiplying it with the split percentage stored in flex number field.

17 Data Augmentation is the new Customization

18 SO Modifications in RevPro Case SO Full Invoice Partial Full revenue Partial SO gets Invoice released revenue updated released Case Yes Case Yes Case No Case Yes Case Yes - - Yes if Case 6 SO>INV - - No if Case 7 SO<INV

19 System Calculated List Price Business Requirement Configuration Challenge Entity does not have list price for the Service Lines in the Revenue List price is required for allocation of SSP. Contract, but allocates a sell price. System calculates the List Price after The Service Line is distinct for hardware and software lines. explosion of the Service Line into Service for Hardware and Service for Software.

20 Solution Setup 1 Bundle explode the Service Line into specific Service for Hardware and Service for Software Lines. Setup 2 Bundle explosion line will have records for the fixed percentage of the list price of the total hardware lines / software lines associated to the service coming in the revenue contract. Setup 3 Using Customisation each service child line (Service for Hardware and Service for Software) will be assigned the related Hardware / Software associated to it. Setup 4 Using Customisation a total of the list price of the associated Hardware / Software Lines in the same Revenue Contract will be stamped on the respective service line. Setup 5 With Data Augmentation the percentage value brought in Step 2 will be multiplied to the Hardware value record stamped in Step 4 to get the List Price of the associated service line.

21 Transaction result Example

22 Acceleration of Revenue recognition 01. Business Requirement 02. Design Challenge 03. Solution An organization is into rental The rental POB still has some Set SSP for rental line to $0. and sale business for the same unexpired period for which line of products. revenue has to be booked. Extended list price for the sales line will be reduced by A customer initially takes the But since the product has been the amount of rental income. product on rent, but before the sold the rental line does not expiry of the rental term buys the same product. hold any value. Assumption - the grouping records for the rental and sale line should be the same and The rental POB should not there is no other line in that further book revenue and the RC. revenue for sale should be booked immediately.

23 Solutions could be far but not impossible

24 CONSULTING Our team of experts who has years of industry experience provide strategic advisory services. IMPLEMENTATION Rich experience in implementing RevPro for Global Enterprises. SUPPORT Managed services for Revenue Operations for large enterprise customers. OUR TEAM Well qualified team of Chartered Accountants (CPA Equivalent) and Technology professionals Proficiency in ASC 605/97-2/08-1 and ASC 606/IFRS 15/NEW GAAP 1602 The Alameda # 100, San Jose, CA , Kumar Prestige Point, Pune , MH, India.

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