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Transcription

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2 MASTERCLASS Subscription Management in Exact Online

3 Turn your customers into subscribers EXACT -

4 Turn your customers into subscribers EXACT -

5 2018 EXACT

6 Turn your customers into subscribers EXACT -

7 Turn your customers into subscribers EXACT -

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9 Growth! 8 of 10 customers purchase more frequently free 57% More than half 57% would continue to subscribe if Prime only offered delivery benefits 2x Amazon Prime members spent 2 as much as nonmembers USD 1300 versus 700.

10 Join the everything-as-a-service economy Why? Improve customer retention & loyalty 38% Improve revenue predictability Recurring services by default (e.g.rent) Finding new customers 11% 10% 25% Other 16%

11 Exact Online Subscription Management

12 EXACT ONLINE FOR SUBSCRIPTION MANAGEMENT All-in-one business software designed to support subscription-run businesses. Available as an add-on module for accounting & industry solutions in all countries

13 d Exact for Subscription Management - benefits

14 Timely & correct invoicing Process flow

15 Process flow Packaging & pricing New subscription Manual API Import Subscription period Recurring invoicing Up & downgrades Renewal period Automatic or manual renewal Recurring invoicing Up & downgrades Cancellation Cancellation period

16 d Demo - Timely & correct invoicing

17 2018 EXACT - demo

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20 Timely & correctly invoicing How to package and price your recurring services?

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22 Pricing and packaging for fixed recurring charges

23 Subscription items

24 Subscription conditions We support the following billing frequencies: Monthly Quarterly Half-yearly Yearly You can also specify the billing interval (e.g. every 2 months or 3 years) and other key subscription terms (e.g. do you want to renew subscriptions automatically?)

25 How to handle one-time charges (e.g. a set-up fee)? -

26 How to handle volume- based discounts (e.g. tiered-pricing*)? * Only in WD & MAN editions

27 How to handle time-based discounts (e.g. provide a 50% discount for the first 3 months)?

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29 Batch price updates (e.g. annual increase for inflation correction)

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31 d Measuring growth using subscription metrics: MRR

32 Better track performance and monitor growth trends using MRR In a typical subscription-run business growth is achieved by acquiring new customers, upgrading existing customers, and preventing customers from cancelling ( churning ) or downgrading their subscriptions. Measuring growth can be hard. Especially when you are offering multiple subscription plans with dissimilar terms and conditions. No matter whether you are a start-up or a public company, one of the key metrics used to monitor growth in a subscription run business is Monthly Recurring Revenue (MRR). The MRR metric helps you to average your various pricing plans and billing periods in to a single and consistent number that you can use to determine whether or not you are on track in realizing your growth objective.

33 Powerful subscription analytics to monitor growth and retention Spreadsheet hassle? Excel does not support growing organizations with multiple subscription models in getting answers How to forecast real growth and churn rates when offering multiple subscription plans? How to deal with frequent changes, up & downgrades? Which segments are growing? How does my new business contribute to my growth? Did my sales and marketing efforts achieve the desired results? 3

34 My dashboard

35 Choosing the right metric to monitor growth More information:

36 2018 EXACT - demo

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38 Cash is king d

39 Better make decisions based on planned invoices Invoice forecast

40 Invoice forecast Better make cash-flow planning decisions based on forecasted revenues What will I invoice in the next 3 months? When to plan an investment or marketing campaign?

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43 Subscription accounting Deferred revenue vs. MRR

44 Deferred revenue What is deferred revenue? Deferred revenue is, in accrual accounting, money received for goods or services which have not yet been delivered. According to the revenue recognition principle, it is recorded as a liability until delivery is made, at which time it is converted into revenue. (source wikipedia) Deferred revenues are based on invoiced amounts. MRR differs from deferred revenue as it is not based on invoiced amounts it is based on the subscription conditions (specifying e.g. subscription enddates, renewal and cancellation periods) and subscription line items

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47 Deferred revenue Deferred revenues are based on invoiced amounts. MRR differs from deferred revenue as it is not based on invoiced amounts it is based on the subscription conditions (specifying e.g. subscription enddates, renewal and cancellation periods) and subscription line items

48 Flexibility Mid-term changes

49 Mid term changes January February March April May June July August September October NovemberDecember January February March Annual subscription invoiced on 1 st of January Upgrade on the 1 st of June Downgrade on the 4 th Oct.

50 Let s assume we have an annual subscription invoiced upfront on the 1 st of January for the entire year.

51 In the middle of the subscription period, on the 1 st of June, the customer wants to upgrade his subscription by adding a new product (back-up service) to his subscription. You can add a new subscription line and set the start-date to the 1 st of June.

52 Upon saving you will be prompted a message asking you to generate a correction invoice for this upgrade

53 A correction invoice is generated. Exact Online calculates the prorated charge for this correction based on the number of days in a given month, quarter or year. This is an annual subscription, so the base is the number of days in a year. Given that 2016 has 366 days and the subscription period for the add-on is 214 days (1 st of June until 31 st of December 2016) the customer will receive an invoice with the prorated amount (214 days divided by 366 days = 0,58). The quantity is set to 0,58 (of a year). The customer needs to pay 69,60 eur (ex vat) for the extra services subscribed to in 2016

54 January February March April May June July August September October NovemberDecember January February March Annual subscription invoiced on 1 st of January Upgrade on the 1 st of June Downgrade on the 4 th Oct.

55 Let s further assume that on the 4 th of October this customer wants to downgrade the number of users in his subscription from 10 to 8. In order to make this downgrade you can set an end-date to the original subscription line of 10 users (to 3 rd of October) and add a new subscription line for 8 users. Now a credit invoice is generated for the downgrade

56 Upon saving you will be prompted a message asking you to generate a correction invoice for this downgrade

57 An additional invoice is generated for the period 4th of October 2016 to 31st of December Exact Online calculates the prorated charge for this correction based on the number of days in a given month, quarter or year. This is an annual subscription, so the base is the number of days in a year. The add-on is prorated for this period. Given that 2016 has 366 days and the subscription period for the add-on is 89 days (4th of October 2016 to 31st of December 2016) The quantity is set to 0,243 (part of a year) * the number users. The invoice will show 2 lines: a credit is issued for 10 users (-291, 60 eur) and an additional invoice line for 8 users (234 eur). The customer will receive a credit invoice for -57,60 (ex vat) Tip: The field item quantity shows the quantity in the subscription, so in this example 10 and 8 users. These can be printed on the invoice.

58 On the 1 st of January 2017 the subscription is automatically renewed an invoice for 2017 is generated.

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60 Track invoice history

61 Summary

62 Exact Online for Subscription Management All-in-one business software designed to support subscription-run businesses. Available as an add-on module for accounting & industry solutions in all countries

63 Tips: Demo Trial subscription Exact Online for Project Management Advanced contains demo data used today. E-learning On creating subscription items: UK_Subs_SubscriptionItemsU/ On adjusting subscriptions: UK_SubsRen_AdjustSubscriptionsU/

64 THANK YOU