Do you believe your finance system is current and that your operations are working smoothly? If you answered yes, it’s possible that you already have the most up-to-date financial software.
Some CFOs, on the other hand, may be encountering difficulties because their processes are ineffective and outdated.
Managing subscription expenses is the most difficult aspect of obtaining a new banking system. Because most companies are afraid of these costs, they continue to use the same old system.
In light of this, an increasing number of organizations and solution providers are now offering subscription-based services in order to address consumers’ growing need for innovative and convenient products and services.
Tackle unique challenges of subscription businesses
Organizations’ revenue recognition procedures get increasingly complex when they add new subscription-based solutions, and many are challenged to incorporate the pricing and billing scenarios required to function at scale.
Microsoft has announced the public release of Subscription billing for Microsoft Dynamics 365 Finance to suit the rising need of enterprises to manage the particular demands of subscription-based business models. Users of Dynamics 365 Finance can take advantage of subscription billing at no additional cost.
Problems with the subscription business model
Adopting the correct technology solution and aligning operational processes to support the complexities of recurring income is often the most difficult task of migrating to new subscription-based business models.
Such as with product-as-a-service offers customers pay for a single, easy line item. This normally necessitates firms becoming adept at distributing sections of customer payments for revenue recognition.
A new approach to Subscription billing
Subscription billing includes features like recurrent contract billing, revenue distribution, and revenue and expense deferrals. All of these features are to help you manage recurring income. In the rest of this blog piece, we’ll go over a general review of these features and how they might help chief financial officers (CFOs) deal with subscription economy concerns.
Users have more control over pricing and billing parameters, contract renewal, and consolidated invoicing with recurring contract billing.
Recurring contract billing can also manage one-time, milestone, and usage-based billing requirements, as well as tiered or flat pricing schemes. Finally, the quote-to-cash process is sped up using the recurring contract billing feature.
One of the specific issues that players in the subscription economy confront is distributing revenue into multiple revenue streams for accounting purposes.
Subscription billing’s revenue allocation functionality allows users to automate complex allocations. And maintain revenue compliance by handling price and revenue allocation across many goods.
By assigning default and standalone selling prices and methods to goods, it helps firms comply with International Financial Reporting Standard (IFRS) 15 and Accounting Standards Codification (ASC) 606 in particular.
Also, with Subscription billing’s revenue and expense deferrals ability, users can automate revenue and expense deferral processes in accordance with the US generally accepted accounting principles (GAAP).
The service also allows you to create schedules for future period posts and consolidate bills in a secure and simple manner.
Bottom Line
Users of Dynamics 365 Finance can take advantage of subscription billing at no additional cost – ultimately reducing the cost of acquisition. Furthermore, some recent improvements have made this offer even better.
DHRP, as your Microsoft partner, can assist you in better understanding the advantages of the above subscription services, pricing model, and subscription options. For additional information and consultation on Dynamics 365 Finance reach out!
