The SIIA is delighted to introduce one of the newest members to join SIIA’s Software & Services Division, Leeyo. I had a chance to sit down with the Co-Founder, CEO and CTO, Jagan Reddy, to learn a little more about automated revenue accounting and forecasting. Please find my interview below.
Rhianna: Tell us about Leeyo and what makes you unique.
Jagan: Founded in 2009, Leeyo is a financial software and services company dedicated to helping companies transform their complex revenue accounting and forecasting processes by successfully automating them, so they can be confident their financials are accurate, on-time, compliant and predictable. Leeyo lets you transcend manual processes and spreadsheets to minimize risks of restatements, penalties, law suits and delayed close. With Leeyo, you can automate and manage every process in your revenue cycle – seamlessly integrating with any ERP systems to deliver unparalleled visibility, functionality and configurability to the revenue recognition and reporting processes.
Leeyo’s product RevPro is the leading revenue automation solution, with successful implementations in a wide range of industries, including technology, hardware, software, biotechnology, telecommunications, healthcare and finance. RevPro’s rules-based engine automates the most complex revenue processes to produce consistent and accurate revenue data quickly and easily. It integrates with any ERP – or works as a stand-alone solution – and can be deployed on-cloud or on-premise. Leeyo’s RevPro has successfully processed over $250 billion in revenue annually across its customer base.
Rhianna: The new revenue recognition standards have been out for a while now, why does there seem to be a lack of urgency about preparing for the new standards?
Jagan: According to an expansive survey by PricewaterhouseCoopers (PwC) and Financial Executives Research Foundation (FERF) in late 2016, many companies are still assessing the impact of the new revenue standard and some haven’t even started. For those still in denial, they may not believe the new standards will have a significant impact on them, they may lack the resources or skill set, or they may need for further clarification on the proposed amendments and additional accounting topics. We believe it takes between 15-18 months to properly implement the new standards. With the fiscal Q1 2018 effective date just around the corner, companies should get started right away,
Rhianna: With the new revenue recognition rules, where do SaaS companies start to ensure their finances are in compliance?
Jagan: This is a big question! The rise of new business models including the subscription-based economy is making proper revenue recognition more complex than ever. Before ASC-606, revenue from a SaaS contract would typically be recognized over the life of the initial subscription. Yet under the new guidance, if a customer has a multi-level right to renew such a contract following the initial subscription period, then you may be required to recognize that revenue well beyond the initial subscription contract duration and/or renewal period as well. The shift from short-term, one-time isolated transactions to long-term, recurring customer relationships drives a host of new challenges. SaaS companies need to look at the new data requirements, their pricing structures, their billing models and their accounting needs for amendments in the current standards. Beyond the functionality in RevPro, Leeyo also assists companies who implement RevPro in identifying and documenting their revenue policies and, through the implementation, provides an audit and compliance trail for verification.
Rhianna: With such complex revenue accounting and forecasting today, how can automation help and give CFOs confidence in financial reporting?
Jagan: Many companies are still attempting to manage the process using spreadsheets. In addition to being manual, slow and fraught with errors, spreadsheets do not allow for version controls, security or operational controls, audit functionality or automation. Also, they are not scalable to meet large company enterprise revenue recognition and reporting needs. With ASC-606 and IFRS-15, it’s time to ditch the spreadsheet altogether and move to automation. Not only does automating revenue recognition free accounting organizations from the tedium and challenges of manual spreadsheets, it offers companies significant ROI across a number of important vectors including cost savings, accelerated closing and improved accuracy.
Also, ERP system providers have failed to deliver complete and integrated revenue recognition capabilities in their systems – systems which were never built for that purpose in the first place. A standalone solution like Leeyo’s RevPro is better than an ERP.