Zuora Launches Zuora Revenue: The Only Automated Revenue Recognition Application for Subscription Businesses
Zuora, the leading cloud-based subscription management platform provider, announced the launch of Zuora Revenue, the latest release of RevPro, and the only automated revenue recognition application built for subscription businesses and their ASC 606 and IFRS 15 needs. Fully integrated with the entire Zuora order-to-revenue (OTR) suite of applications, new Zuora Revenue features enable companies to achieve a faster quarter close, minimize compliance risk, and more precisely forecast the revenue impact of business decisions.
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“The IDC MarketScape: Worldwide Subscription Management 2019-2020 Vendor Assessment”
Businesses across industries are moving to subscriptions, with IDC’s FutureScape Report predicting that by the end of this year, 50 percent of the world’s largest enterprises will see the majority of their business depend on their ability to create digitally enhanced products, services, and experiences.
Successful subscription businesses are finding that the key to growth is giving their subscribers freedom — allowing them to make changes anytime to their subscriptions, quotes, orders, and contracts. In fact, those that give their customers the freedom to make changes to their subscription services can grow five times faster than companies that don’t, according to data in a Subscribed Institute Benchmark.
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However, enabling subscriber freedom disrupts traditional approaches to revenue recognition. The Benchmark data shows that companies see an average of five transaction events per subscriber per year. In addition, new ASC 606 and IFRS 15 rules for revenue recognition have vastly increased the work required to assess how revenue should be recognized, introducing a five-step process through order to revenue. The combination of volume and complexity is overwhelming to current systems that were not built for subscriptions.
The excruciatingly long revenue recognition process is worsened whenever a subscriber makes a change to their contract. Robert Kugel, Senior Vice President and Research Director at Ventana Research, said, “Contracts in subscription businesses are complex: they have multiple elements and frequently change to suit the customers’ needs. Companies that derive even some portion of revenues from subscriptions that have tried using manual revenue recognition processes have discovered that this method isn’t scalable or sustainable. Ensuring that the details about subscriptions in a company’s billing and accounting systems are exactly the same as the data collected by the front office at the time orders or changes are received is critical.”
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