Zuora, Inc. (NYSE: ZUO), the leading cloud-based subscription management platform provider, today announced the launch of Zuora® Revenue, the latest release of RevPro®, and the only automated revenue recognition application built for subscription businesses and their ASC 606 and IFRS 15 needs. Fully integrated with the entire Zuora order-to-revenue (OTR) suite of applications, new Zuora Revenue features enable companies to achieve a faster quarter close, minimize compliance risk, and more precisely forecast the revenue impact of business decisions.
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Automate revenue recognition with the only order-to-revenue suite built for subscriptions (Graphic: Business Wire)
Businesses across industries are moving to subscriptions, with IDC’s FutureScape Report predicting that by the end of this year, 50 percent of the world’s largest enterprises will see the majority of their business depend on their ability to create digitally enhanced products, services, and experiences.
Successful subscription businesses are finding that the key to growth is giving their subscribers freedom — allowing them to make changes anytime to their subscriptions, quotes, orders, and contracts. In fact, those that give their customers the freedom to make changes to their subscription services can grow five times faster than companies that don’t, according to data in a Subscribed Institute Benchmark.
However, enabling subscriber freedom disrupts traditional approaches to revenue recognition. The Benchmark data shows that companies see an average of five transaction events per subscriber per year. In addition, new ASC 606 and IFRS 15 rules for revenue recognition have vastly increased the work required to assess how revenue should be recognized, introducing a five-step process through order to revenue. The combination of volume and complexity is overwhelming to current systems that were not built for subscriptions.
The excruciatingly long revenue recognition process is worsened whenever a subscriber makes a change to their contract. Robert Kugel, Senior Vice President and Research Director at Ventana Research, said, “Contracts in subscription businesses are complex: they have multiple elements and frequently change to suit the customers’ needs. Companies that derive even some portion of revenues from subscriptions that have tried using manual revenue recognition processes have discovered that this method isn’t scalable or sustainable. Ensuring that the details about subscriptions in a company’s billing and accounting systems are exactly the same as the data collected by the front office at the time orders or changes are received is critical.”
Companies that have not automated billing and revenue recognition under the new standards have seen roadblocks to their growth including:
- Long close times resulting from spreadsheets and time-intensive manual processes which require increased headcount and resources and are more prone to human error.
- Greater risk of longer audits, errors, and revenue restatements from the application of complex accounting to inconsistent and disparate data.
- Inability to properly forecast revenue when business decisions like pricing and billing changes are implemented without data visibility across the entire OTR process.
Zuora Revenue is the only order-to-revenue solution that understands the full range of subscription transactions, is built around ASC 606 and IFRS 15, and offers a high degree of automation. The new Zuora Revenue capabilities include:
- Continuous subscription revenue recognition to enable subscription businesses to achieve a faster quarter close. By uniting billing and revenue processes, businesses can easily manage the transactional complexity resulting from customers making ongoing changes to their subscriptions and revenue recognition can be automated along every step of the subscription OTR process.
- Regulatory process automation to recognize revenue while minimizing compliance risk. Automating the process for regulations such as ASC 606, IFRS 15, Standalone Selling Price (SSP), and performance obligations under GAAP, enables companies to accurately manage revenue recognition under new standards to significantly reduce accounting staff workloads, reduce the risk of accounting and billing errors, and shorten the close process.
- Real-time subscription data collection to precisely forecast the revenue impact of business decisions. Enable business growth and collaborate more efficiently using daily data from revenue waterfalls to advise on better upstream processes such as pricing and packaging strategies.
“Our mission is to help every company win in the Subscription Economy® and now, for the first time, companies can fully automate their subscription processes from the order all the way through to revenue recognition. Zuora Revenue now enables continuous accounting and we have re-architected the traditional linear model of order-to-cash to expand our value to customers,” said Chris Battles, Chief Product Officer at Zuora.
Companies across all industries are using the integrated solution, with early adopters including Unity Software and Command Alkon.
Felipe Lopez, Director, Revenue Accounting at Unity Technologies said, “With Zuora Billing and Zuora Revenue, we now have an end-to-end solution that allows us to operate our day-to-day and month-end close processes with regard to billing, collections and revenue accounting with greater efficiency and accuracy, enabling us to support the rapid scale of our business. We have also improved our reporting and forecasting capabilities, based on actual order level activity, as transactions are processed in our systems. With Zuora Revenue and Zuora Billing we can deliver real-time reporting to key stakeholders at any time with the click of a button, something that wasn’t previously possible until we completed our month-end close.”
The completed integration combines Zuora’s industry leading applications. Zuora Billing was cited as a leader by Forrester in “The Forrester Wave™: SaaS Billing Solutions, Q4 2019” report and by IDC in “The IDC MarketScape: Worldwide Subscription Management 2019-2020 Vendor Assessment,” while Zuora RevPro was a top-rated vendor in the MGI 360 Ratings on Automated Revenue Management.
Mark Thomason, Research Director for IDC responsible for Digital Business Models and Monetization practice said, “Zuora’s integration between their CPQ, Billing, and Revenue applications not only automates the order-to-revenue process for all subscription businesses, but it also gives these finance teams the agility and flexibility to drill down and drill back across their entire upstream and downstream processes. Being able to analyze and understand recurring revenue faster and accurately now gives finance teams the time and data they need to collaborate on better pricing, payment, and cash collection strategies.”
Jason Pikoos, Partner, Financial Operations Practice Leader at The Connor Group, a Zuora Revenue implementation partner, said, “We are working with Zuora to address the surging market demand for quote-to-revenue transformation and automation. Companies, whether large or growth, are scaling finance and revenue operations to grow their businesses and seize the sizable opportunities of the X-as-a-Service Economy. Executing these strategic objectives requires CFOs to have real-time insight to their subscription data, including customer lifecycle events, billing, and revenue recognition.”
About Zuora, Inc.
Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy®, the Zuora platform was architected specifically for dynamic, recurring subscription business models and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription Order to Revenue process seamlessly across billing and revenue recognition. Zuora serves more than 1,000 companies around the world, including Box, Rogers, Schneider Electric, Xplornet and Zendesk. Headquartered in Silicon Valley, Zuora also operates offices around the world in the U.S., EMEA and APAC. To learn more about the Zuora platform, please visit www.zuora.com.
© 2020 Zuora, Inc. All Rights Reserved. Zuora, Subscribed, Subscription Economy, Powering the Subscription Economy, and Subscription Economy Index are trademarks or registered trademarks of Zuora, Inc. Third-party trademarks mentioned above are owned by their respective companies. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of Zuora, Inc. or any aspect of this press release.
SOURCE: Zuora Financial