BuyFrame Advisory Services
Why bill upstream?
Align Order-to-Ledger upstream
The Challenge
The billing and revenue recognition process for subscription and variable revenue involves complexity that can’t always be handled by customising or upgrading the Finance system. This causes a reconciliation gap between booked orders and downstream billing and revenue recognition. To bridge this gap, manual processes are created to align orders with a) billing schedules b) revenue schedules. These processes are usually fragmented across different charge types: one-time, recurring, and usage, further exacerbating the challenge.
The Impact
A complex web of reconciliation steps that struggle to separate cash-flow from revenue, resulting in a) unbilled (or incorrectly billed) orders b) lack of granular revenue forecasts across usage based, recurring, and one-time services products. The end result, unbilled revenue, collection delays, and underleveraged IT investments.
Suggested Approach
Align upstream. Orders generated during the sales cycle, should encapsulate both the billing / cash-flow element, and the revenue schedule/recognition element in the form of order products. As a result, distinct revenue streams get generated based on the charge type (usage, recurring, or one-time). The transaction journal entries are pre-aligned with the G/L, and flow through without manual intervention.
Reduce revenue leakage and drive free cash flow
