This document provides an overview of subscription billing and revenue recognition capabilities and benefits. It discusses business goals around increasing ROI, making better decisions, and ensuring GAAP compliance. It outlines challenges of complex billing schedules, evolving standards, and non-integrated systems. Capabilities listed include producing real-time analytics, forecasting revenue, and integrating billing with ERP. Benefits include reducing costs, avoiding errors and non-compliance. Live examples demonstrate managing deferrals and contracts in Excel can be error-prone versus an integrated solution. It concludes by inviting questions.

1. Subscription Billing for
Dynamics GP/AX/
D365/NAV/BC
Neil MacDonald CPA CMA
Solutions Consultant
Binary Stream
www.binarystream.com

2. Introduction
Neil MacDonald CPA, CMA, PMP
• 30+ years progressive Business, Project and IT Management, formal
management and financial training, technical and industry certifications
• Project management and technical leadership in the delivery of IT and ERP
implementations
• Resolution and consulting skills in applying best practices and efficiency
initiatives
Career History:
Solutions Consultant 2011 – Present
Dynamics GP Consultant 2007 – 2011
Mgr. IT and Process Improvements 1993 – 2007
Education:
• CPA (Chartered Professional Accountant)
• CMA (Certified Management Accountant)
• PMP (Project Management Professional)
• MCSE (Microsoft Certified System Engineer)
• MCBMSP (Microsoft Certified Business Management
Solutions Professional)

3. Business Goals Challenges Benefits Live ExampleCapabilities Q & A
Agenda

4. Business Goals - Billing
• Increase ROI – Do more with less
tools/people
• Make better decisions
• Identify and eliminate waste /
inefficiency
• Reduce quote to cash time
• Ensure GAAP compliance
• Faster access to the right data at the
right time
• Fewer repetitive tasks
• Reduce data entry errors

5. Business Goals – Rev Rec
• Comply with revenue recognition standards
• Accurate and prompt information
• Create accurate forecasts / reports
• Complete control over when recognition
entries are posted
• Satisfy audit requirements with reduced
effort
• Minimize reconciliation at month-end
• Eliminate effort required to create
recognition schedules

6. Challenges
• Complex billing and revenue recognition schedules
• Multiple pricing models
• Revenue / expense recognition schedules in Excel
• Evolving accounting standards
• Multiple non-integrated systems for quote to cash

7. Capabilities
• Produce real time sales analysis
• Forecast future revenue streams
• Eliminate manual rekeying of data and redundant processes
• Produce invoices / financial reports in a timely manner
• Integrate contract management and billing system with ERP
• Create evergreen renewal schedules
• Guidance for GAAP compliance
• Modify a schedule at any time
• Record revenue in the period in which it’s earned
• Manage deferral process within existing accounting system

8. Benefits
• Reduce quote to cash cycle time
• Reduced cost of maintaining multiple systems
• Reduced data entry expense
• No revenue “leakage” due to missed renewals
• Minimize audit expenses
• Avoid non-compliance penalties
• Goodwill & other intangibles

9. Live Examples!

10. • Create a deferral line for each deferred item
• Reconcile it each month, looking for changes, updates, adding new lines, deleting retired lines
• Create a manual JE each month
• Manage events/milestones manually
• Now imagine you have 10’s of thousands of contracts, with 5 to 10 lines each!
• Add ASC 606 complexity on top of that!
Deferrals in Excel
Month 1 Month 2 Month 3 Month 4 …
Setup Fee $5,00024 mos. 208.33 208.33 208.33 208.33 …
Service Contract $12,00012 mos. 1,000.00 1,000.00 1,000.00 1,000.00 …
Pro Services $3,000Event ? ? ? ?
Month 1 - Recognize revenue
Deferred Revenue 1,208.33
Revenue 1,208.33

11. Initial Contract:
Item Ext. Price Type Contract Value SSP Contract SSP
Reallocated
Contract
Revenue Period Revenue
HW 15,000.00 One time 15,000.00 17,000.00 17,000.00 15,095.44 15,095.44
Setup Fee 5,000.00 One time 5,000.00 5,000.00 5,000.00 4,439.83 4,439.83
SAAS SW 7,000.00 Monthly 168,000.00 8,000.00 192,000.00 170,489.63 7,103.73
SW Annual Maint. 12,000.00 Def. 12 mo 24,000.00 12,000.00 24,000.00 21,311.20 10,655.60
Prof Services 3,000.00 Def event based 3,000.00 3,000.00 3,000.00 2,663.90 2,663.90
Discount - 1,000.00 - 1,000.00 - - -
41,000.00 214,000.00 45,000.00 241,000.00 214,000.00 39,958.50
Remember the formula: (Item SSP / Sum of SSPs) * Contract Value
Example: SAAS SW: (192,000 / 241,000) * 214,000 = 170,489.63
Jan 2016 Invoice:
Item Ext Price Revenue Distribution
HW 15,000.00 15,095.44 AR 41,000.00
Setup Fee 5,000.00 4,439.83 Sales HW 15,095.44
SAAS SW 7,000.00 7,103.73 Sales Setup 4,439.83
SW Annual Maint. 12,000.00 10,655.60 Sales SW 7,103.73
Prof Services 3,000.00 2,663.90 Deferred Rev Maint 10,655.60
Discount - 1,000.00 - Sales Prof Serv 2,663.90
41,000.00 39,958.50 Contr.Rev.Clearing 1,041.50
41,000.00 41,000.00
ASC 606 Example – Using Excel

12. A recent report from the EU found
over 50% of all critical spreadsheets
in large organizations contained
“material defects”!
http://www.eusprig.org/basic-research.htm - European Spreadsheet Risks Interest Group

13. Thank you! Any Questions?
If you have any questions, please contact your
Binary Stream Account Manager or call 604-522-6300
sales@binarystream.com