Subscription and consumption billing have transformed enterprise software and SaaS companies, which can bill based on recurring charges, customer usage, or a combination of models. At the same time, these companies often sell multiple items on a contract, including service and training engagements that might entail complex milestone billing.
Companies want to handle multiple bill types in one system, enabling them to provide a single invoice to clients and to reduce the number of back-office applications they must support. These companies must also track their billing and revenue to contract obligations and renewals. The SOFTRAX Revenue Management System (RMS) gives companies this single-system solution for support of all billing models, revenue recognition, and contract management.
Revenue recognition for enterprise software and SaaS companies is complicated, especially for companies that sell multiple items on a single contract with discounts. Revenue recognition often involves complex accounting processes to perform carve-outs, allocation against Stand-Alone Selling Price (SSP), scheduling of revenue recognition, management of hold conditions and triggers, and more.
Companies need to account for several other factors, including disaggregation of revenue, reconciliation of contract balances, current and remaining performance obligations, and the cost to obtain contracts. SOFTRAX RMS can automate the most complex revenue recognition processes, allowing enterprise software and SaaS companies to focus on their core businesses.
SOFTRAX RMS is the industry’s only single-source platform for billing and revenue recognition, providing support for evergreen subscription billing; multi-tier pricing, including minimums and overages; transaction-based charging, royalty tracking, commission charges; and contract-to-date and current-to-date transaction accumulation.
The requirements of ASC 606 impact enterprise software and SaaS companies more than companies in almost any other industry. Factors like whether the arrangement contains licensees or is a pure SaaS arrangement need to be determined and monitored.
SOFTRAX RMS can easily meet customized reporting needs for ASC 606 and enterprise software and SaaS companies. The SOFTRAX RMS meets these requirements in an automated, cloud-based solution that eliminates spreadsheets and workarounds, reduces human errors, and increases the agility of your back office.
Do you know the five steps of ASC 606 and the impact of them on your revenue? The SOFTRAX ASC 606 Checklist can help.