August 26, 2011 Winnie Jeung Jeff Jackson - Atlanta...

Leeyo Software, Inc. Confidential and Proprietary Information2011 (c) Leeyo Software, Inc. All Rights Reserved

Atlanta OAUG – August 26, 2011

Winnie Jeung

Jeff Jackson


Copyright and Disclaimer

Design concepts and functionality contained in this document is the

Intellectual Property of Leeyo Software, Inc.

No part of this document may be stored in a retrieval system, transmitted or

reproduced in any way, including but not limited to photocopy, photograph,

magnetic or other record, without the prior agreement and written permission

of Leeyo Software, Inc.

Material included in this document is the protected Intellectual Property of

Leeyo Software, Inc. and it is released subject to provisions of a “Mutual

Non-Disclosure Agreement” or a “License Agreement” between Leeyo

Software, Inc. and the Recipient of the information from Leeyo Software, Inc.

And disclosure and use or any extracts are limited to Recipient’s employees

who have a “need to know” and who are bound by similar non-disclosure and

use agreements with Recipient.


Agenda

1. Leeyo Introduction

2. Revenue Best Practices

3. Accounting Guidance

4. RevPro Overview


Leeyo at a glance

Founded by IT and revenue recognition experts

RevPro product development:

• Started in 2007 with SOP 97-2

• Expanded in 2009 with EITF 08-1

• Planning ahead for IFRS convergence

Profitable within first year of RevPro introduction

Partnerships:

• Oracle Gold Partner

• Working relationships with Big 4


RevPro Sample Customers

6

Quoting Booking Shipping Billing Collection

FASB Guidelines

Revenue, Deferred Revenue & COGS,

Deferred COGS


Revenue Best Practices

Best Practices RevPro Functionality

No manual calculations (no Excel, no Access DB)

All revenue calculations and reports are within the system and available anytime

People effort on review, not crunching #s All revenue calculations are automated and review workflow stays within system

Fast revenue close No need to wait for period end• Auto-process daily • Review daily / weekly

Real-time forecasts Daily auto processing allows for daily auto forecasting

Real-time auditor & management reports All orders have automated management reports, audit schedules and support docs linked in system

Accounting users not reliant on IT All reports, report writing, rule changes, etc. are done by user through the RevPro user interface


Revenue Rules: Where we are today

ASU 2009-13 (fka EITF 08-1) for multiple-element arrangements Exception: Software still follows ASC 985 (fka SOP 97-2)

Effective for fiscal years after June 15, 2010

Prior to EITF 08-1, many followed SOP 97-2 if products included

“more than incidental” software

Today only optional software products still follow SOP 97-2 Pure software companies

Optional “non-essential” software (ASU 2009-14 (fka EITF 09-3))

Basic revenue recognition criteria have not changed:1. Collectibility

2. Delivery

3. Evidence of arrangement

4. Fees are fixed and determinable

Rules to link transactions have not changed


SOP 97-2 vs EITF 08-1

ASC 985 (fka SOP 97-2) ASU 2009-13 (EITF 08-1)

Fair Value: VSOE, TPE Fair Value: VSOE, TPE, or ESP

Fair Value required only on undelivered elements

Fair value required on all elements

Allocation = Residual method:Discount allocated entirely to delivered elements(full VSOE value for undelivered)

Allocation = Relative Selling Price Method:Discount allocated proportionately to all elements based on fair value

Simpler revenue calculations; Fewer revenue adjustments

More complex revenue calculations;High volume of revenue adjustments

Complex deals may require full deferral:- Partial shipments, lack of VSOE on undelivered elements

Full deferral less likely.More revenue recognized sooner, as each element is delivered


Looking ahead: IFRS Convergence

Joint project: FASB and IASB

Goal = Single revenue recognition standard across all industries

Final guidance expected by end of 2011

Approx 1,000 comment letters received

Effective date not yet determined; Expected 2014 or 2015

Retrospective adoption required; Revenue today may be impacted


Looking ahead: IFRS Convergence

Five step approach:

1. Identify the contract(s) with the customer• Contracts may be written, verbal or implied, based on customary practice.

2. Identify and separate performance obligations in the contract(s)• More performance obligations may be identified:

• Examples: future discounts/products, risk of loss while in transit

• Software: Separate deliverables even if VSOE doesn’t exist

3. Determine the transaction price• Estimated uncollectible amounts booked as contra-revenue

• Consider time value of money if payment terms > 1 year

4. Allocate the transaction price to separate performance obligations• Based on relative standalone selling price (similar to EITF 08-1)

• SOP 97-1 goes away; no more residual method

5. Recognize revenue when a performance obligation is satisfied• When customer has the ability to direct the use of, and receive the benefit from, the

good or service.


Changing how revenue recognition is done…

RevPro by Leeyo is a suite of powerful revenue modules

that automate specific revenue management requirements:

Automates:

fair value analysis

linking transactions

revenue allocations

and carve-outs

Automates release of

revenue:

with timing

contingencies

provides real-time

revenue forecasts

Provides real-time

revenue analytics

with drill-down

capabilities

Automates channel

revenue

management:

for point-of-sale

(POS) data

provides real-time

channel revenue

analytics

Revenue Allocation (RRA) Module


VSOE:

• collect standalone

sales history

• bell-shaped curve

auto-analysis

(B)ESP:

• rule-based calculator:

o discount off list

o cost + margin

o typical VSOE

• BESP optimizer

Multiple stratifications

Instant FV calculation results

User defines criteria for linkage:

• PO

• contract

• CRM opportunity ID

Easy to manage and review:

• manually link / de-link

• audit trail

Multiple allocation methods

• relative selling price (08-1)

• residual (97-2)

• stated renewal and others

Revenue carve-out/ins posted

directly to ERP

Revenue Management (RRM) Module

RevPro becomes your revenue subledger. In the ERP, all revenue would be deferred upon invoice.

RRM Highlighted Features : Define contingency rules to control release of revenue

Contingency rules applied automatically to transactions

Trigger revenue release automatically or manually

Override amortization schedules to control timing of revenue

Process COGS consistently with revenue release & deferral

Generate revenue forecast for deferred revennue and backlog orders


Integration with Oracle EBS



RevPro Architecture

We value your investment in Oracle EBS. RevPro resides within Oracle EBS

and eliminates integrations and infrastructure cost


Thank you!

Jeff Jackson

[email protected]

Winnie Jeung

[email protected]

Phone : (877) 500 6901

[email protected]

New website Sept 9: www.leeyo.com

We invite you to see the unparalleled power of

RevPro by Leeyo in a live demo

mailto:[email protected]



http://www.leeyo.com/

Date post:	14-Mar-2018
Category:	Documents
Upload:	dinhkiet
View:	219 times
Download:	5 times

August 26, 2011 Winnie Jeung Jeff Jackson - Atlanta...

Documents