In little more than a decade, business models have made a colossal shift from selling products to subscription services that require subscription accounting. And it’s not just software that’s available as a service (SaaS). Call it Anything/Everything-as-a-Service (XaaS), and while companies like Netflix, Spotify and Salesforce are prominent examples, the trend extends far beyond the tech industry. You can now subscribe to bacon or a BMW as easily as you can to movies and music. There’s even a fledgling cannabis subscription company (maybe they need Silverware’s Silver Leaf CBC, an ERP solution for cannabis processors and manufacturers).However, XaaS is more than just bolting on services and goes beyond simply repackaging products for sale on subscription. Enterprises on this journey are blending together discrete products and services, and as part of the shift, they need financial and accounting software capable of making the shift with them. Here, in part four of our Accounting and ERP Capabilities that Matter series, we look at five ways Sage Intacct is the ideal fit for today’s subscription companies.
Born and raised in the subscription economy
Sage Intacct is a leader in the subscription management space (and many other industries as well). The product was first to market with a total solution for companies that sell contracts or subscriptions and need to comply with new revenue recognition guidelines (ASC 606 and IFRS 15) without laborious processes and spreadsheets. Whether your organization is already in the subscription business, or whether you’re migrating to this model, Sage Intacct offers specialized capabilities that matter to you—capabilities you can grow your subscription business on.
In contrast to other ERP systems that must spread their development resources across wide-reaching and disparate areas, Sage Intacct is a true financial management solution designed for finance professionals and their teams. As such, the company’s R & D is heavily focused on enhancing core accounting functionality—like subscription accounting. Sage Intacct invests heavily in the software and SaaS vertical markets, with a steady stream of new capabilities to simplify subscription management in each new quarterly release.
Five ways Sage Intacct is the ideal fit for subscription companies:
1. Compliance and auditability
Subscription accounting has always been complicated, but ASC 606 and IFRS-15 took it to another level. Sage Intacct streamlines subscription accounting and automates ASC 606 and IFRS-15 compliance. At your go-live with the software, you can make use of a utility that rebuilds historical activity into your subledger to allow for immediate retrospective reporting and insight. You can even set up compliance and audit checklists with steps tailored to your company’s unique contract review processes (think Sign, Confirm, Review, etc.). The list appears in every contract and users with the right permissions can check off items as they are completed, along with their comments.
2. Connect the entire enterprise
Subscription organizations aren’t unique in the benefits they receive by connecting the front and back offices—but the complexity of those interactions sets you apart. You’re not selling widgets, you’re selling contracts that can have multiple variables and numerous triggers. Sage Intacct comes with prebuilt integration to Salesforce, so you can connect sales to accounting—and everyone else for that matter. It’s a single subscription system of record from the quote all the way through to GL, revenue recognition, reporting and forecasting. With Sage Intacct, you get one view of your customers across billing, revenue recognition (including unbilled) and cash.
3. Real-time forecasting
As organizations move from traditional transactional sales model to contract or subscription selling, they have to adapt to an entirely different revenue schedule. This makes accurate, real-time forecasting vital. By providing a single subscription system of records, Sage Intacct streamlines and automates forecasts providing the best, most reliable and timely data you need to guide the decisions that make your business a success.
4. Unified billing
Subscription billing is unique, to say the least. Within your organization you may have a blend of pricing models, including usage, tiered, price per xx, minimum flat fees, units, overages, and more. You may bill for both products (SaaS), or services or both, and there may be maintenance and support fees as well. Very few software systems can handle this level of variation, but Sage Intacct can. It provides a comprehensive, flexible, unified billing platform that simplifies internal operations and speeds your billing processes.
5. Intelligent GL
Traditional accounting solutions with a single ledger simply won’t cut it for sophisticated subscription companies; your reporting requirements are too complex. Sage Intacct is light years beyond these static systems with its Intelligent General Ledger. What does that mean to you? It means posting happens as you go, allowing you to soft close throughout the month. It means you have multiple ledgers and can close subledgers independently, leaving others open for processing. It means you can enter a transaction once yet represent it across multiple financials (GAAP, IFRS, etc.). It means you’re armed with actionable insights—business intelligence—to help you make rapid and proactive decisions.
Leading the pack
Overall, software providers have been slow to adapt to the needs SaaS/XaaS businesses have around managing financial operations, subscriptions and customers. Because of this, many subscription businesses rely on spreadsheets and other add-on tools to supplement their accounting software’s shortcomings. While this may work in the short term, it’s not a scalable model and will eventually break down.
Sage Intacct is an exceptional solution for subscription businesses—designed from the inside out to address the complexities of subscription accounting. But don’t just take our word for it: Sage Intacct was recently named a Leader in the new IDC MarketScape: Worldwide Subscription Management Applications 2019–2020 report. You can download an excerpt of the IDC MarketScape report with analysis on Sage Intacct here. And when you’re ready to talk, connect with one of our Sage Intacct experts here.