Case studies / Technology
Case studyBilling and consolidation for a multi-subsidiary software group
A software group with several subsidiaries and currencies moved subscription billing, revenue recognition and consolidation onto NetSuite, making revenue reporting reliable and month-end simpler.
Overview
A private-equity-backed software group made up of several acquired product companies, selling business software on subscription to mid-market customers in the UK, Ireland, the Nordics and North America.
Scale. Six subsidiaries in four currencies, about 3,000 subscription contracts, and a mix of recurring licence revenue, one-off implementation services and usage-based charges.
The challenge
Every acquisition had brought another finance system, another billing process and another way of counting recurring revenue. By the time the group had several subsidiaries, the monthly board pack was an act of assembly rather than reporting.
Billing was manual. Each subsidiary invoiced from its own tools, some from accounting packages and some from spreadsheets. Renewals, uplifts, add-ons and mid-term changes all depended on someone noticing them and raising the right invoice.
Consolidation was manual too. Subsidiary trial balances were exported, translated into the group currency and combined in a workbook, with intercompany charges eliminated by hand. Month-end took long, and late adjustments rippled through the whole pack.
Revenue reporting was unreliable. Annual recurring revenue, deferred revenue and recognised revenue were calculated differently in each subsidiary, and investors were asking questions that the finance team could only answer with caveats.
The group planned further acquisitions. Without a common platform, each one would make the problem worse.
Collections suffered as a result. Customers who received late or incorrect invoices paid late, and some disputed renewals on the grounds that they had never been properly invoiced for the previous term. The finance team spent time on credit notes that better billing would have avoided.
The solution
NetSuite financials now run every subsidiary on one chart of accounts, with automatic currency translation, intercompany elimination and consolidation. The group close is a sequence of checks rather than a spreadsheet build.
Subscription billing holds every contract with its products, prices, terms and renewal dates. Renewals, uplifts and add-ons generate invoices on schedule, and usage charges are billed from data supplied by the products.
Revenue recognition applies the group's policies automatically, splitting bundled contracts into licence and services and recognising each correctly. Deferred revenue balances and waterfall reports are produced from the system.
Order management takes signed deals from the CRM, so sales, billing and finance work from the same contract. Procurement and approvals give the group control over spend across subsidiaries.
A tax engine calculates sales tax and VAT in each jurisdiction, and payments are collected through the gateway and matched automatically. Recurring revenue metrics feed the data warehouse for board and investor reporting.
Bank feeds for each subsidiary import statements daily and match receipts to open invoices, so cash positions are current across the group and the finance team only handles genuine exceptions.
The engagement
- Six months
- Five specialists
- Billing, revenue and consolidation process mapping, NetSuite financials, subscription billing and revenue recognition, order management and procurement, five integrations, contract migration and a parallel close.
Integrations
- Payment gateway
- CRM
- Banks
- Tax engine
- Data warehouse
How we delivered it
- 01
Map billing and revenue
Five weeks
We mapped billing, revenue recognition and consolidation in every subsidiary and agreed common policies, including how subscriptions, services and usage should be recognised and how contract changes should be handled.
- 02
Configure NetSuite
Nine weeks
We configured NetSuite financials with multi-subsidiary consolidation, subscription billing and revenue recognition, order management and procurement, and connected the CRM, payment gateway, banks, tax engine and data warehouse.
- 03
Migrate and reconcile
Six weeks
Customers and contracts were migrated from every subsidiary and reconciled, contract by contract, to billing history and deferred revenue balances. Contracts with missing or inconsistent terms were corrected with the commercial teams.
- 04
Parallel close and launch
Six weeks
We ran a full month-end close in parallel on the old and new processes, investigated every difference and then launched on NetSuite from the following period.
Results
- Simpler, predictable month-end consolidation
- Consistent and reliable revenue reporting
- Fewer billing errors on renewals and add-ons
- A ready-made template for future acquisitions
Month-end consolidation has become simpler. The group closes on a predictable timetable, and late adjustments no longer require rebuilding the pack.
Revenue reporting is more reliable. Recurring revenue, deferred revenue and recognised revenue are calculated the same way across subsidiaries, and investor questions are answered from the system.
Billing errors have fallen. Renewals and uplifts are invoiced on time, add-ons are not missed and customers receive accurate invoices in their own currency.
The platform is ready for the next acquisition. A new subsidiary can be added to NetSuite with the group's policies already in place, and its contracts can be migrated using the same approach.
Cash collection has improved as a by-product. Invoices that arrive on time and match the contract are paid on time, and the number of credit notes raised each month has dropped.
The software only bills what the contract says. Fixing the contracts was where the accuracy came from.
What made the difference
Contract data quality determined billing accuracy.
