Professional services companies relying on ERP systems to manage the complexity of their businesses often find they just don’t have the functionality and integration needed to run a tight ship. They are forced to manual spreadsheets, customizations, and other work arounds. SOFTRAX has over 20 years of experience deploying revenue accounting in the context of a complex Professional Services Automation (PSA) environment, enabling companies to bypass expensive customizations or reliance on spreadsheets and meet current and emerging business and reporting needs.
The SOFTRAX Revenue Management System (RMS) is designed to receive orders from upstream CPQ, CRM, or other systems. Orders may be specific to professional services, or include other components, such hard goods, software license or subscription, and other items.
The SOFTRAX RMS integrates with PSA systems through a PSA gateway. Upon receipt of order, it passes order information and key identifiers specific to the professional services lines on the order to the PSA system. Users of the PSA system use this information to flesh out the project, key milestones, resource assignment, etc.
The SOFTRAX RMS simultaneously passes order data to its billing and revenue recognition engine, to start these processes. Fixed price services can be handled via a one-time or milestone set of bill schedules. In this case, the PSA system sends notification of milestone or other bill events to the SOFTRAX RMS, which constructs the matching invoice. Percent of Transfer information is sent to the revenue recognition engine of the SOFTRAX RMS to ensure proper and timely recognition of revenue. Time and expense work can be billed as incurred and recognized as performed. In this case, data is sent from the PSA system to the SOFTRAX RMS to ensure the proper billing and revenue recognition occurs.
SOFTRAX automates order capture, billing, fulfillment, and revenue recognition for ASC 606, providing a professional services organization with the capabilities to track time and expenses more completely, deploy resources and manage projects more effectively, and generate services invoices more promptly and accurately. This automation ensures that the sales and finance teams at professional services organizations can stay focused on the core business.
Professional services organizations deal with complex contracts, making reporting and compliance with ASC 606 more difficult than other industries. Companies need to account for a number of factors, including disaggregation of revenue, proportional allocation against SSP, disclosure of contract asset and liability balances, potentially contract modifications and combinations, and the cost to obtain contracts. The SOFTRAX Revenue Management System can easily meet the ASC 606 reporting needs for even the most complex contracts, letting an organization be confident in their compliance reporting.
Do you know the five steps of ASC 606 and the impact of them on your revenue? The SOFTRAX ASC 606 Checklist can help.