Analytics and Dashboard
A modern business has to be able to access stored data and identify trends in order to enable better decisions. A good revenue management system will offer advanced analytics and dashboards for better decision making. Subscription metrics like customer churn, customer activity, ageing of receivables, can provide invaluable insights on the health of the business and allow business owners to take corrective action or leverage a particular trend further. For example, a customer of a carrier service for a mobile offering using pre-paid card could be topping up his card for $10 each time, totaling $100 in a month. The system should be able to capture this data on customer behavior and analyze it to offer some usable insights. For example, the business can recommend a one-time free recharge of $90 per month worth $100. The customer will be happy with the little bit extra and this evidence of personalized attention, and the business will get its money at one go. The billing system should have the framework to analyze the data and provide trends and analytics to the service providers and recommend actions based on the reports.
Taxation and compliance are not easy areas to handle for any sector, but when it comes to the UCaaS domain, this task is particularly complex with multiple jurisdictions, changing tax rates, and registration requirements. A modern cloud enabled billing system should be able to compute complex taxation applicable, calculate the correct charges for invoicing and ensure that the business remains compliant with all existing and new compliance regulations. The system should be able to integrate with specialized taxation systems and provide real time integration with tax modules. Taxation becomes even more complicated when providers offer bundled services and the system should be intelligent enough to address the nuances of complex orders. For example, it should be able to account for discounts on certain parts of a bundled offer, location based taxes (ship to and ship from), have standardized ways of classifying communication services, and even be able to handle tax remittance and out of the box reporting.
Revenue Recognition & Accounting Regulations
The amounts of earned and unearned revenues or which revenue is recognized immediately and what can be deferred, is especially significant in a subscription business. There are complex rules and regulations governing this space, for example, let’s assume a service provider charges $30 as pay per
use. He charges the amount at the beginning of the month. But the revenue regulation policy does not allow for the entire $30 to be recognized immediately even if payment is complete, since the payment is 30 days ahead of service. Only when the business provides services for those many number of days, can the revenue be recognized. This is earned vs.unearned revenue that is recorded in the financial books and this is a key function that the billing system has to be able to handle.
There are other complexities when it comes to service cancellation – for example, lets say a customer has signed up for one-year term but want to cancel after 6 months. The system has to be able to manage the computation for the remainder of the term (6 months) and the cancellation policies that define the treatment of charge given to the customers. So in this case, the business may choose to accelerate the revenue recognition for the reminder period due to cancellation (as per the policy) or the business may choose to refund a portion of the remining period by applying proration + cancellation fee. In either case, billing system should have the capability to deal with the business rules defined for revenue recognition policies.
“ The system should also be able to handle revenue recognition reports.”
There are two types of metrics that the businesses would like to see while offering a subscription services: Billed revenue vs unbilled revenue. Billed revenue means invoiced the customer for these charges; unbilled revenue are pending transactions that are not invoiced yet. this gives visibility to business owners of how much revenue that can be billed when it is time for billing. Can we add the 505, 606 and SAP60 standards that’s important for Subscription business and their compliance as additional point?
Download Ebook: How to grow a UCaaS Business and win customers