Do you deal with complex billing models? Does your company wonder how to effectively track revenue recognition to comply with ASC 606 and IFRS 15 regulations? You’re not alone. More companies are experimenting with subscription and consumption billing models, while also supporting legacy billing models. Or companies find that subscription billing isn’t the right choice for their business and choose to revert to one-time billing.
Companies that sell subscriptions in the B2B space often provide services such as implementation, training, and other forms of support. This may require billing one-time or complex milestones on the same invoice as subscriptions. And this can mean complying with complex portions of the ASC 606 and IFRS 15 guidance, such as managing variable consideration and performing proportional allocations against Stand Alone Selling Price (SSP).
The SOFTRAX Revenue Management System, or RMS, is the solution to your billing and revenue recognition challenges. The RMS billing functionality handles complex billing models, such as subscription and consumption. And it also handles legacy one-time and milestone billing models. As part of a cohesive revenue management platform, the billing functionality works in unison with the SOFTRAX RMS revenue recognition functionality. It automates generating billing schedules, generating invoices, and delivering to your customer. It also automates revenue recognition and supports the most complex areas of ASC 606 and IFRS 15 with every billing event.
SOFTRAX RMS provides transparency across billing and revenue recognition over the life of your customer relationship. At any moment, you can review your revenue position, and see whether you are in a contract asset or a liability. With SOFTRAX RMS, there’s no need for two separate systems for billing and revenue recognition. And, there’s no need for juggling multiple spreadsheets and expensive customizations. Let’s take a closer look at the four billing models.
The subscription billing model occurs when you bill your customer a fixed, recurring amount at an agreed interval for a subscription-based product or service. This model is popular in SaaS computing industries for customer access to a service. With SOFTRAX RMS, you can configure each customer’s billing dates, invoice frequency, and preferred delivery method to meet your most complex subscription billing needs. You can bill for one-time fees, such as activation fees, and recurring fees based a set fee, the number of users, or quantity purchased. For each type of fee or product, SOFTRAX RMS enables you to configure, and fully automate, how revenue is recognized. For example, you can recognize an activation fee at a point-in-time but recognize SaaS fees invoiced in advance for the year ratably over the duration of the subscription.
The consumption, or usage-based, billing model occurs when you bill your customer based on their usage of your product or service. It’s popular in cloud computing and utility industries. You can again fully configure the frequency and billing dates. In addition, you can easily scale and adjust your rates using minimums, tiering, and overages. The RMS revenue recognition functionality automatically tracks the amount of goods and services used in each cycle and recognizes revenue accordingly. You can automatically manage variable consideration to recognize revenue based on what you expect your customer to consume and update it over time.
The one-time billing model is a legacy powerhouse. You invoice your customer once for a product or service. How you define your automated revenue recognition policies determines how you recognize that revenue as you deliver the service or product over time. Do you bill before you perform the service? Or do you deliver the goods and then invoice? No problem. Revenue is deferred or recognized as billed or unbilled to suit your needs.
The milestone billing model is often associated with construction or project-driven industries. You invoice your customer at agreed-upon events or deliverables according to your contract. The SOFTRAX RMS billing functionality schedules your invoices according to the terms and total value of your contract. When you indicate that a milestone is reached, the invoice is automatically generated. As with other billing models, revenue recognition is then automatically triggered and fully automated with our powerful policy engine.
Are you ready to explore how YOU can use SOFTRAX RMS for your billing and revenue recognition? Contact us at sales@softrax.com to schedule a 30-minute consultation.
SOFTRAX milestone billing software simplifies your milestone billing challenges. Now it is easy to construct complex milestone schedules, stay informed of pending milestone invoices, and perform ongoing contract modifications. SOFTRAX milestone billing software makes milestone billing manageable.
SOFTRAX subscription billing software is the perfect solution for managing simple and complex billing schedules.
It deploys easily for simple and complex subscription models, captures all stages of revenue, and eases reporting for ASC 606 / IFRS 15.
SOFTRAX consumption and usage based billing software lets you effectively manage the complexity of usage based billing. Now you can easily monitor and factor the amount of consumption occurring in each month, including minimums, overages, and tiers.
With SOFTRAX contract renewal management software, renewals happen in a timely manner and for the appropriate revenue amount, including any agreed-upon uptick in the renewal rate.
SOFTRAX milestone billing software simplifies your milestone billing challenges. Now it is easy to construct complex milestone schedules, stay informed of pending milestone invoices, and perform ongoing contract modifications. SOFTRAX milestone billing software makes milestone billing manageable.
SOFTRAX subscription billing software is the perfect solution for managing simple and complex billing schedules. It deploys easily for simple and complex subscription models, captures all stages of revenue, and eases reporting for ASC 606 / IFRS 15.
SOFTRAX consumption and usage based billing software lets you effectively manage the complexity of usage based billing. Now you can easily monitor and factor the amount of consumption occurring in each month, including minimums, overages, and tiers.
With SOFTRAX contract renewal management software, renewals happen in a timely manner and for the appropriate revenue amount, including any agreed-upon uptick in the renewal rate.
SOFTRAX has more than 20 years of experience in providing billing and revenue recognition solutions enabling us to offer the industry’s most comprehensive features. Our legacy gives us an in-depth understanding of customer needs, pain points, and areas of growth across a number of industries. The SOFTRAX RMS is the only multi-tenant cloud platform supporting sophisticated billing and revenue recognition in a single application.
Ensures your billing activity is always synchronized with the latest changes and amendments to a contract’s key elements.
Automatically generates billing schedules and manages transactions over the life of a customer relationship.
Manages royalties, commissions, and other expenses based on percentages, fixed amounts and unit rates while automatically assigning expenses to vendors, salespeople, and products.
Automatically processes billing schedules by policy, removing human interaction on a transaction-by-transaction basis to increase efficiencies and decrease risk.
Makes it easy to customize billing according to your customer’s needs allowing you to take a customer-first approach to billing management.
Extensive reports and data give accountants, auditors, and executives unparalleled visibility into past, current and future business performance.
“Through an outstanding collaborative effort with the SOFTRAX team, we improved our use of the SOFTRAX features and functionality that will help Epicor grow and scale its install base and recurring billing.”
“SOFTRAX offers the flexibility to handle the various forms of complex billing and revenue recognition we require. SOFTRAX helps us maintain our controls at a system level, keep close times short, and avoid a need to scale human resources as our business has grown.”
“SOFTRAX is a win-win for us. We saw significant efficiency improvements within two weeks of go-live. We have dramatically increased our transaction volume through organic and M&A related growth without a need for increased headcount.”
“SOFTRAX helped us capture an opportunity to operationalize the new revenue recognition guidance with automation that advanced our existing process.”