Welcome to the recurly revenue recognition standard demo.
My name is, David Kraus, and I will be your host for the next few minutes, and then we will transition to a, demonstration of our new product offering.
I will be joined again by Austin Carrella, who is our vice president of product for our our revenue recognition solutions.
So quick introduction before we get to the demo on recurring revenue recognition, we're currently launched our rev rec solution last year with advanced features to address enterprise class, rev rec requirements, and complexity. Now while this is great for most of our merchants looking for those advanced capabilities, we found not all of our customers face the same level of complexity when it comes to recognizing their revenue and complying with accounting standards like a c c six zero six. So to better address the broader market of companies that can benefit from revenue recognition automation, but have more basic or standardized revenue and pricing models We're currently just released our recurring revenue recognition standard solution.
This new addition will still enable you to automate compliance with accounting standards But it's really intended for less complex revenue recognition or record requirements that are associated with standardize subscription billing scenario then we'll get into some more details of what we mean by that.
So how exactly does data flow from recurring subscription management and billing into our revenue recognition engine. This high level diagram depicts how we've done most of the heavy lifting for you, providing a seamless data exchange from subscription plans, billing events against those plans, and directly feeding into our rev rec engine, and the auto creation of revenue contract. Thereby defining the performance obligations or POBs and then automapping the journal entry postings to the appropriate GL account The whole goal is to accelerate your revenue close and limit any manual data entry.
And as mentioned earlier, we can even help you bring in data and analyze data from multiple revenue sources, including the Apple App Store, or Google Play. This will enable you to essentially view all of those revenue sources in one place across both web and app stores. And you can easily run readily waterfall reports, and sort information by book, by currency, or period, and map specific app or general entries directly to your GL accounting codes.
So without further ado, after that introduction, I will hand the reins over to Austin, who will go ahead and show you what the product looks like.
Thank you, David. That's a great introduction of the product feature that we are releasing.
It's all a one application. Right? As you all know, that it currently provides a subscription management, billing management, as well as a revenue recognition solutions within the platform.
Now all of them is available in the same platform. If you look at, actually, our configurations and the revenue recognition, have we seen within the system.
Now the core important thing for us to recognize the revenue in the six zero six every single plan, as well as, the items and charges needs to be associated with the performance obligation, That is the key activity, a step two in six zero six guidance to talk about when do I recognize the revenue? How do I recognize the revenue?
So to make it simple, we provide a flexibility at the business entity level. You get to choose how and when I can recognize the revenue.
So, let me quickly go into my the specific instance here.
And, when I go into the specific instance, you can see the configuration. Under the configuration, you can see the base business entities If I go to the business entity, you get to choose what is my default liability account and revenue account that can be used in the system across the plans, as well as item charges, gift cards, and know, refunds and so on.
You get to define these liability accounts are by using the manage journal ledger accounting.
I can create a new accounting code. I can say, you know, two zero zero three zero It's mainly for the subscription management, maybe monthly. It can also be either the liability or revenue. You can categorize by that. And you can give a description to say, this is mainly for the monthly default revenue.
But any transaction that you want to target, that way you can this is a good thing. Actually, if you already have an account, it is going to tell you this account already exists. If you want to create a new account, you can just go create a new account. That can be used later in any of the applications either under the plan, under the item, and so on.
Now since I created equity, I should be able to see that account under my drop down so now that is what is available here. So two zero zero three two is a new account that I created a clear defined and associated to the entity level. What does it really mean? It means to me, actually, when I go create new plans, the plan can have a default account coming out of the business entity for the setup tree.
However, I do have an option to you can choose which different account I want to use at the setup level. I can see for this plan that I'm creating, it's a monthly plan Monthly, subscription, monthly sub. It's a MS.
And let us assume, actually, you have a setup fee for this, and I can say setup is nine dollars ninety eight cents. And that nine dollars ninety eight cents can be recognized under the obligation. This setup will be a loan. I can say whenever subscription is generated.
I can recognize the revenue at the point in time, and I can use the the two zero zero one zero as account for the liability, which is a different revenue. And when it comes to the revenue, I can actually either use the revenue account. I already defined at the entity level or I can click and choose the new revenue account specific to this particular plan within the plan a setup b. At the same time, I can also say the setup fee can be appointed time.
However, the actual plan itself is a war type. We provide multiple options, whether you want to recognize the revenue on a daily beast. As example, the month of February could be twenty eight days, March is thirty one days, and April is thirty days and so on. So it's gonna be up and down.
Or I can say, hey, just give me a straight line. Which means that only on the beginning month and the last month is number of days. And it's except that the full month is always going to be recognized on a monthly basis. The same time, as I explained before, you could get a chance to pick your own account or use a default account you already defined at the business entity.
Once you defined this plan, once I initiate this plan, if I start using this plan at my subscription level, And that is when you get to automatically see those subscription. For example, if I go back to the accounts and let's say create a they go create a CC stuff and I add a new subscription under the subscription. Let me go pick up an annual plan or monthly meal plan. And in the monthly main plan, I'm just picking up my value and bill how often what is my subscription terms and so on.
Eventually when I go subscribe and invoice the merchant, the my invoicing can be seen as a value under the unwire invoice, you can see what is the line item, what is my revenue recognition method, whether it's gonna be daily, weekly, or month and also it's gonna tell you what liability account and what revenue account I am going to be using as part of this particular plan.
So what does it mean? I generated my invoice. Now I can go back and see how my waterfall and revenue accounting are coming in. We provide out of the box three reports, which is a waterfall report as well as the library balance report and transfer accounting report.
The waterfall report is all about. It is going to give you by month by month, how is my revenue getting recognized?
Wi by default, we'll give you a scanned scanned, quick start of module. However, you should be able to define your own layouts and how do you want to do to recognize? You want to show the sixty months, twelve months, fifteen months, whatever the duration you want to show the waterfall, you could do that.
Here is my waterfall.
It gives me an every single month how I'm recognizing the revenue. For example, this is a charge that I made again as a c c. That is nine dollars ninety nine cents. I've chose, actually, the point in time, I'm recognizing everything in point in time versus the annual plan where I'm recognizing over time every single month, the system is recognized based off a number of days in that month For example, I'm in the month of October, thirty one days.
I'm recognizing for three hundred and forty one days. What's this now about thirty days, it is going to be three hundred and eleven days. Since I chose a partial the daily method here, if you are up picked up a day, partial monthly every single month, system would have given the same number straight line. This is one key report for everyone to visualize exactly how their revenue is getting scheduled.
And how it is getting recognized. You come you get a chance to either run by report, not only for the current month. Even if people pick up my historical month, I should be able to do that. And the the key thing is I should be able to run not only in the currency that I create my invoices and subscription, I should be able to run my transactions or waterfall report either in the company currency or the global An example could be I am creating an invoice in Euro, and my reporting currency is in USD.
If I pick up my global currency as a USD, automatically, the output will be generated and converted into the USD and show being shown here. You can add any number of features I can say, I want to look at only a particular item. I don't want to look at every single item. I can do slides and dice.
I want to look at only the monthly meal plan So if I go back and pick up monthly meal plan as a filter, you should be able to run your waterfall only for those evil items. So you can add any dimension to the the need and you can run the report. At the same time, I would also be able to pick up any of those attributes that we provide in the system. For example, if I'm running my report, I have a few columns that I'm showing here in dimensions.
I would say, I have by product, by customer, by origin, by subscription, by dates, what if if I don't want to display the accounts here at the waterfall report, I can I can take it out and also say, I want to include maybe few other columns? I should be able to say, I want to know what is an accounting code, which is something about customer ID. Or I should be able to say, I don't see a value out of origin. You can pick and choose what attribute, what dimension you wanted to be able to run your report, At the same time, we have multiple objects.
You should be able to pick and choose your columns. I don't want to look at individual contractors, but I want as a contract, I want to see by a customer. So now if I read on my report, I should be able to see all of those new dimensions, which can be sliced and dice your waterfall report into.
The same report can be downloaded in many formats. You can say, I wanna download in the text column or a CSV or JSON or Excel All those formats are available for you. At the same time, if I wanted to be able to save my layout, you should be able to save a new dashboard which can be reused every time when you come back into the pool.
The next key report would be your library balance report which is nothing but your deferred revenue road forward. And many people known as this report is going to give you exactly what is my ending balance How is my different billing balance is coming out? So and also all the new billings has been happened in the system.
So the capabilities of the reporting slides and dies by any dimension is very similar to what I've shown into the waterfall report. I can enable and disable any of the column. Now I want to focus on more on to the the key value that report is bringing to the table. One actually is what is my bringing balance? This big link balance is all about my ending deferred revenue balance from the last month. Same time, the new billings that I included in the current month, all the invoices are generated in the current month. Now how much did I recognize the revenue?
Either it is from the current billing or from the prior beginning balances. System is going to give you all the balances, all the revenue that I generated per current month. Next important thing actually is how much is my ending balance.
The ending balance is coming back your bringing balance, plus or minus your new billings, and then how much of the revenue that you're recognizing, that is what is remaining left. To be shown as your ending balance. The moment I get into the next period right now, I'm in the month of, August. If I close my August and get into the next period, my ending balance at that time will become a beginning balance of the next next month. That's why we call this as a rule forward report.
Every single period, your balances will be keep updating every time every time new invoice comes in, new subscription comes in. Any refunds, cancellation, termination, upgrades, downgrades, all all of those transactions will get included in the report so you can get an accurate ending balance which will be shown at the end end of the period, and that can be shown in the next month as well. At the same time, at any given time, let's assume or the hour to go back, not only for the I want to go back to the last twelve months. I wanted to run the report as of the period. You should be able to pick up those periods and run the report at any given time in the past.
As I said before, you should be able to not only run the report by transaction currency You can also run by company currency and the global currency. We automatically bring in the the open exchange rate on a daily basis, and we can kind of the final report in the your reporting currency, and we display the values in the respective currency.
The one I showed you before, you should also be able to slice and dice by any column. Well, whatever the reason why I wanted to be running my, the data by the plan code and accounting code. I want to slice by that, not by individual item, individual subscription, a digital origin, you should be able to pick those columns and you can change your dimensions and then get your report output in that fashion.
The reporting is very, very flexible. This is what, actually, every merchant would look for at the end of the month, and we auto record every, changes that is happening to the subscription. Upgrade downgrade, refunds, credits, refund, you know, write offs. All of those will be auto, accounted in this, system.
Last one, but there are the least is your journal accounting entry that would be available to record back into your g l system. Again, as I said before, by default, we we give you few of the kind, dashboards, but you should be able to change and save and download in any format you want. The beauty actually is we are agnostic to any of the ERP system, which means that actually you can generate the output the way you want be uploading into your jail system. Similarly, here, I just gave you an example here.
This is my by by each of those, contract I'm going to show you exactly how much is my revenue is getting debited. Different revenue is getting debited and revenue is getting created. At the same time, I don't want to show at this level, I want to summarize at the account level. I could simply do it.
I can just go back and then say, I don't want it to show it by item.
I don't want it to show it by, the the contract ID, I useful to show you by period. I just summarize it. So because already all the details are available within the recurring platform, I don't want to take all the retail entries back into the jail system. This is the this is how simple. Actually, you can go and add, delete columns and summarize and do a slice and dice.
Or else, let's say a particular in your system, you need data to be available in certain format you should be able to add your custom fields and say, our defaults and values. You can depends on rules. At the same time, I can say, I want to do show by the product. Every single plan code level, I want to really display my output back on the jail system. You should be able to do that too.
So that is that that easy, the output is going to be generated. You can just generate the totals and you can download the report and upload back at your g l. Now this actually concludes that, actually, we are able to give you a very simple system that gives you an automated way of recognizing your revenue by different obligations, different GL codes. You don't have to use the same GL account that everything's in the level.
Right? You can say I were each of the different plans. I want to use the different GL codes. So it's within the monthly versus annual versus, quarter you want to have a different yield codes.
At the same time, I want to have a different, the plans having a different types of recognition, you can pick and choose how my obligation is coming in. Not only at this planned item level, while creating a charge, while creating a gift card, while creating the refunds, you should be able to pick and choose what GL accounts that you want to be impacting into if you wanted to do that.
Thank you so much.
Thank you, Ashwin, for the great demo and summarizing our new revenue recognition standard edition solution.
For those of you that are interested in learning more, please visit recurly dot com slash products slash regular recognition or simply contact your recurrent sales representative. Thank you again for joining us. Have a good day.
