1. How to Leverage Your Upgrade to R12.1 with
Robust Revenue Recognition Automation
Presented by Patrick Glenn, Leeyo Software
Leeyo Software, Inc.
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2. Agenda Revenue recognition overview Addressing the challenges
What’s needed
Opportunities with R12.1
Leeyo Software, Inc.
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3. Revenue Recognition
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:
Evidence of an arrangement exists (governing contract & PO)
Delivery has occurred (transfer title and risk of loss)
Fee is fixed or determinable (normal payment terms)
Collection is probable (customer has ability to pay)
Leeyo Software, Inc.
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4. In other words – it’s HIGHLY TECHNICAL
Revenue Recognition
Continuing revenue projects
Modifying Multiple Element Arrangements (to include Best Estimate Selling Price) & Exclusion of Tangible Products from Software revenue Recognition Guidance – Effective 2009
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
Leeyo Software, Inc.
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5. Why it is Important 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:
Leeyo Software, Inc.
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6. What Options Exist Crayola Crayons Etch A Sketch Apple Enhanced IIe
Microsoft Excel
Leeyo Software, Inc.
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7. The Next Generation Tool
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
Leeyo Software, Inc.
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8. The Next Generation Tool
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
Leeyo Software, Inc.
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9. Quote-to-Cash Process
Here’s What It Looks Like
User-defined
Revenue
Contingencies
Fair Value
Analysis
Auto Accounting
Rules
Amortization
Methods
Revenue & COGS
Waterfall Schedules
Contingencies
Applied
Revenue Automation
Engine
Events
Delivery
Acceptance
Cash Receipts
Time-bound
FV Assignment &
Allocations
Quoting
Booking
Shipping
Billing
Collection
Deferred
Revenue & DCOGS
Quote-to-Cash Process
Leeyo Software, Inc.
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10. Ensuring Success Understand the business requirements
Articulate unique requirements clearly – avoid “one size fits all”
Set clear expectations and coordinate closely
IT and business planning with all stakeholders
Revenue-speak is different than IT-speak – need a revenue ‘champion’
100% automation is not reality on day 1
Internal project teams and management
Leeyo Software, Inc.
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11. Ensuring Success Data integrity and flow
Migrating from manual systems can be challenging
Historical data may not be readily available
Business process re-engineering
Scalability
Business growth
Path to future upgrades/enhancements
Training
New tool requires practice
Combined support from IT and revenue recognition experts
People
Processes
Systems
Leeyo Software, Inc.
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12. Opportunity – R12 Upgrade
Technical stack software upgrade
No changes to chart of accounts (COA) or organizational structure
Limited configuration changes
Minimal RICE components
Revenue automation will be driven by business user
Leeyo Software, Inc.
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13. Opportunity – R12 Upgrade
Re-Implementation
Changes to chart of accounts (COA) and organizational structure
Planned business process re-engineering
Large number of RICE components
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
Leeyo Software, Inc.
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14. Enhancing R12 with RevPro
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
Leeyo Software, Inc.
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15. RevPro data Collection
Oracle R12 Integration
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. Typical Implementation
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
Leeyo Software, Inc.
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17. Where We Find Success 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
Leeyo Software, Inc.
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18. Wrap-up
Q&A
Contacts
Patrick Glenn – Vice President, Business Development
(408)
Leeyo Software, Inc.
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