How ValueXPA Enabled US-based B2B SaaS Business in Streamlining Finance Processes, Revenue Recognition and Reporting
The Problem We solved Our client sought our assistance in strengthening their Finance processes in order to get an accurate picture of their financial performan
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The Problem We solved
Our client sought our assistance in strengthening their Finance processes in order to get an accurate picture of their financial performance through better reporting. They had previously collaborated with an outsourced team that failed to provide satisfactory support in terms of process continuity and domain expertise. Additionally, their existing accounting process lacked a well-defined SaaS revenue recognition approach as per ASC 606 principles, hindering their ability to identify accrued and deferred revenue, monitor cash flows, and plan investments.
Our client sought our assistance in strengthening their Finance processes in order to get an accurate picture of their financial performance through better reporting. They had previously collaborated with an outsourced team that failed to provide satisfactory support in terms of process continuity and domain expertise. Additionally, their existing accounting process lacked a well-defined SaaS revenue recognition approach as per ASC 606 principles, hindering their ability to identify accrued and deferred revenue, monitor cash flows, and plan investments.
What we Did
We collaborated closely with the client to gain a deep understanding of their processes, and we developed clear process flow as a result. However, we discovered that the business contracts and their term periods were not appropriately captured and recorded, leading to inaccuracies in revenue recognition. We also reviewed the recognition of SaaS recurring revenue and professional services revenue in detail and ensured the application of ASC 606 principles. To resolve this, we utilized data extracts from QuickBooks and maintained regular communication with the client to obtain the necessary contract details. Through this effort, we identified several revenue entries that had not been recorded. We took it up and rectified wherever there were both process gaps and technical gaps.
To prevent similar situations in future, we established an ongoing master file that contained comprehensive customer information, including their respective term periods. This master file serves as a valuable resource for accurately recognizing revenues monthly, aligning with each customer's specific term period. Additionally, we conducted a thorough reconciliation of deferred revenues in the General Ledger, which played a crucial role in identifying and rectifying any missing revenue entries.
Furthermore, we assisted in accurately categorizing various expenses that were previously grouped under a single expense category. By realigning the client's chart of accounts, we ensured accurate expense classification. As a result of these efforts, we were able to close the books monthly in a timely manner and present financial reports that included key insights on revenue, costs, expenses, and variance analysis.
To prevent similar situations in future, we established an ongoing master file that contained comprehensive customer information, including their respective term periods. This master file serves as a valuable resource for accurately recognizing revenues monthly, aligning with each customer's specific term period. Additionally, we conducted a thorough reconciliation of deferred revenues in the General Ledger, which played a crucial role in identifying and rectifying any missing revenue entries.
Furthermore, we assisted in accurately categorizing various expenses that were previously grouped under a single expense category. By realigning the client's chart of accounts, we ensured accurate expense classification. As a result of these efforts, we were able to close the books monthly in a timely manner and present financial reports that included key insights on revenue, costs, expenses, and variance analysis.
How we created an Impact
Through our diligent efforts, we successfully enabled the company's financial reporting and ensured precise SaaS revenue recognition. By implementing accurate accounting practices and procedures, we not only fostered stronger Management and Board Reporting but also ensured compliance with tax obligations. Our unwavering support allowed the company to dedicate more attention to its core business activities while entrusting us with their accounting requirements.