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Leeyo Software, Inc.Confidential1 How to Leverage Your Upgrade to R12.1 with Robust Revenue Recognition Automation Presented by Patrick Glenn, Leeyo Software.

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Presentation on theme: "Leeyo Software, Inc.Confidential1 How to Leverage Your Upgrade to R12.1 with Robust Revenue Recognition Automation Presented by Patrick Glenn, Leeyo Software."— Presentation transcript:

1 Leeyo Software, Inc.Confidential1 How to Leverage Your Upgrade to R12.1 with Robust Revenue Recognition Automation Presented by Patrick Glenn, Leeyo Software

2  Revenue recognition overview  Addressing the challenges  What’s needed  Opportunities with R12.1 A GENDA Leeyo Software, Inc.Confidential2

3 R EVENUE R ECOGNITION Leeyo Software, Inc.Confidential3 What It Is: Principle of accrual accounting that determines the period in which revenue is recognized  Revenue recognition is an earning process  There are rules and regulations on how and when you can recognize revenue  Under GAAP, there are four basic criteria: o Evidence of an arrangement exists (governing contract & PO) o Delivery has occurred (transfer title and risk of loss) o Fee is fixed or determinable (normal payment terms) o Collection is probable (customer has ability to pay)

4 R EVENUE R ECOGNITION Leeyo Software, Inc.Confidential4  Continuing revenue projects o Modifying Multiple Element Arrangements (to include Best Estimate Selling Price) & Exclusion of Tangible Products from Software revenue Recognition Guidance – Effective 2009 o FASB/IASB Joint Projects – Draft format, expect to be finalized end of this year or beginning of next year  Accounting terminology you may hear – FASB and IFRS guidelines, evidence of an arrangement, delivery, fixed fees, collection, software and non-software rules, multiple element arrangements, fair value (VSOE, BESP, TPE), relative selling price, revenue allocation, linked arrangements, acceptance, release events, contingencies, future upgrades, significant discounts, extended terms, software is essential to functionality, deferred revenue release, and so on…. In other words – it’s HIGHLY TECHNICAL

5  Most critical financial statement account  Most complex financial statement account  # 1 reason for public company restatements  # 1 account that is closed manually (i.e. not in ERP)  It’s a key component of their SOX certification: W HY IT IS I MPORTANT Leeyo Software, Inc.Confidential5

6 W HAT O PTIONS E XIST Leeyo Software, Inc.Confidential6 E TCH A S KETCH C RAYOLA C RAYONS A PPLE E NHANCED II E M ICROSOFT E XCEL

7  Fits to existing IT infrastructure  Minimizes IT and maintenance requirements  Is flexible, scalable, and has a low total cost of ownership  Implements in a short time  Improved internal controls on revenue  System-based data repository  Systematically integrates revenue best practices  Globalizes and standardizes of revenue processes T HE N EXT G ENERATION T OOL Leeyo Software, Inc.Confidential7

8  Eliminates time-consuming and error-prone manual systems  Accelerates period-end close and financial reporting cycles  Automates all key revenue recognition requirements  Handles the most complex revenue recognition issues  Simplifies revenue and COGS management  Enables real-time revenue monitoring  Accurately forecasts revenue  Stays current and in compliance with the latest revenue guidance T HE N EXT G ENERATION T OOL Leeyo Software, Inc.Confidential8

9 H ERE ’ S W HAT I T L OOKS L IKE Leeyo Software, Inc.Confidential9 User-defined Revenue Contingencies Fair Value Analysis Auto Accounting Rules Amortization Methods Revenue Automation Engine Contingencies Applied FV Assignment & Allocations Delivery Acceptance Cash Receipts Time-bound Deferred Revenue & DCOGS Deferred Revenue & DCOGS Revenue & COGS Waterfall Schedules Revenue & COGS Waterfall Schedules Quote-to-Cash Process Events Quoting Booking Shipping Billing Collection

10  Understand the business requirements o Articulate unique requirements clearly – avoid “one size fits all” o Set clear expectations and coordinate closely  IT and business planning with all stakeholders o Revenue-speak is different than IT-speak – need a revenue ‘champion’ o 100% automation is not reality on day 1 o Internal project teams and management E NSURING S UCCESS Leeyo Software, Inc.Confidential10

11  Data integrity and flow o Migrating from manual systems can be challenging o Historical data may not be readily available  Business process re-engineering  Scalability o Business growth o Path to future upgrades/enhancements  Training o New tool requires practice o Combined support from IT and revenue recognition experts E NSURING S UCCESS Leeyo Software, Inc.Confidential11 Systems Processes People

12  Technical stack software upgrade o No changes to chart of accounts (COA) or organizational structure o Limited configuration changes o Minimal RICE components O PPORTUNITY – R12 U PGRADE Leeyo Software, Inc.Confidential12 Revenue automation will be driven by business user

13  Re-Implementation o Changes to chart of accounts (COA) and organizational structure o Planned business process re-engineering o Large number of RICE components o Introducing new modules Revenue automation is usually easy to justify  Dollars may be available due to larger overall project  Process improvements lessen automation customization  People and project resources are available and focused  New R12 module features can be leveraged O PPORTUNITY – R12 U PGRADE Leeyo Software, Inc.Confidential13

14 Leeyo’s RevPro is a complete suite of software that automates and manages every process in the revenue cycle – seamlessly integrating with the quote-to-cash processes of any ERP system. Features:  Upload fair values (VSOE, TPE, ESP)  Identify arrangements and link transactions  Allocate revenue and post carve-outs to A/R or G/L Features:  Define release events to auto-release revenue from deferred  Manage contingencies  Revenue waterfall with real-time forecast Features:  Real-time revenue analytics with drill-down capabilities  Pre-built adapters for OBIEE, SAP BW, BOBJ, Cognos E NHANCING R12 WITH R EV P RO Leeyo Software, Inc.Confidential14

15 O RACLE R12 I NTEGRATION Oracle ERP Inbound sources Standard Adapters Sales orders, service contracts, invoices, credit memos, RMA orders, master data (item, customer) RevPro Staging Area Adapter extracts data to RevPro staging per defined schedule RevPro Modules Revenue calculations and output RevPro data Collection Data gets collected to RevPro system RevPro Archive Processed data gets archived

16  Proof of concept (optional)  Business requirements document (BRD)  Design and configuration  Training and conference room pilot (CRP)  User acceptance testing (UAT)  GoLive  Post GoLive support, e.g. quarter-end close  Stabilization and enhancements T YPICAL I MPLEMENTATION Leeyo Software, Inc.Confidential16

17  Customer profiles Public or pre-IPO company – $50M to +$20B revenue Existing manual processes or custom solutions for revenue calculation U.S. GAAP reporting required or planned Concerned about upcoming accounting guidance changes Desire to improve IT controls on revenue  Market – high technology and expanding Software Networking equipment Consumer equipment SaaS W HERE W E F IND S UCCESS Leeyo Software, Inc.Confidential17

18  Q&A  Contacts o Patrick Glenn – Vice President, Business Development (408) W RAP - UP Leeyo Software, Inc.Confidential18


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