In the dynamic world of revenue management and billing, companies face numerous challenges, especially with the advent of ASC606 standards. Tracking complex billing scenarios, managing contract amendments, and ensuring revenue recognition compliance can be daunting tasks. Fortunately, ZoneBilling, a product built natively on the NetSuite platform, offers innovative solutions to tackle these challenges head-on. Let’s delve deeper into the features of ZoneBilling, particularly the game-changing "Prospective Merge," and how it simplifies ASC606 compliance.
ZoneBilling and NetSuite's Advanced Revenue Management (ARM) Module are a powerful combination. ZoneBilling is designed to be a versatile billing solution, capable of handling a wide range of billing scenarios. What sets it apart is its seamless connection to NetSuite's Advanced Revenue Management (ARM) module. Here's why the connection is a game-changer:
- Complex billing made simple: With ZoneBilling, companies can manage even the most intricate billing requirements with ease.
- Independent management: Companies can handle complex billing requirements and revenue recognition independently, ensuring accuracy and compliance.
- Month-end reclassification: Leveraging NetSuite's month-end reclassification process, businesses are able to optimize their financial reporting effortlessly.
- Auto-calculate total contract value: ZoneBilling replaces the traditional Sales Order with a new Subscription record that represents the contract. Based on the services and products provided, it calculates the total contract value. The Subscription record becomes the source transaction feeding NetSuite’s Revenue Arrangement.
- Revenue configuration: ZoneBilling gives you the ability to combine or separate contract lines items into one or many performance obligations. This unique feature provides the flexibility to support the most complex revenue recognition requirements.
The ASC606 Challenge - Contract Amendments:
ASC606 has brought about significant changes in revenue recognition, and one of the notable challenges is dealing with contract amendments. Traditionally, this process could be cumbersome and error-prone, but ZoneBilling's "Prospective Merge" feature has changed the game.
Sample Prospective Merge Scenario:
Your company is upselling one of its customers, meaning there is some type of rip and replace or product swap that is occurring. You’ll need to credit the original order and bill them for the difference of the new subscription.
Unlocking the Potential of Prospective Merge:
ZoneBilling's "Prospective Merge" feature simplifies contract amendments in the ASC606 landscape. Here's how it works:
Prospective Merge is seamlessly built into NetSuite, making it user-friendly and accessible. Users can select one or more Revenue Arrangements that are “In Progress” (ie. Original Order and New Order )and effortlessly split them into two new arrangements. The split creates a "Completed" arrangement (ie. Original Order), representing the revenue recognized before the amendment. A new "Not Started" arrangement (ie. New Order) that encompasses the new obligations and the remainder of the existing agreement.
The Benefits of Prospective Merge:
ZoneBilling's Prospective Merge isn't just a feature; it's a solution to ASC606 challenges. Here's why it matters:
- Simplified Compliance: Prospective Merge ensures companies remain ASC606-compliant even in the face of complex contract amendments.
- Enhanced Accuracy: The feature minimizes errors and discrepancies in revenue recognition, improving financial accuracy.
- Time Savings: With Prospective Merge, revenue teams save valuable time and resources, allowing them to focus on strategic tasks.
In the era of ASC606 compliance and evolving billing scenarios, ZoneBilling's Prospective Merge stands as a beacon of efficiency and accuracy. It empowers companies to tackle complex billing requirements, manage contract amendments with ease, and maintain revenue recognition compliance.
Unlock the potential of ZoneBilling and embrace the future of revenue management with confidence. Simplify your ASC606 compliance journey, streamline operations, and ensure financial accuracy with the innovative Prospective Merge feature. In the ever-changing landscape of revenue management, ZoneBilling's Prospective Merge is your key to success.