Transcript

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Good afternoon, everyone. And thank you for joining us for part three of our Quick Hits series. Today, we're going to be talking about complex billing scenarios.

So we'll talk about different use cases that come up very frequently with some of our customers - prepaid credits with drawdowns, minimum commitments with true ups, and other scenarios like that that are pretty difficult to solve with standard NetSuite or some of our competitors.

My name is Mark Hanson, I'm a Senior Solution Consultant here at Zone. I was born in Chicago, but I've been living in New York City for the past four and a half years. I've been at Zone for a little over two and a half years now. And I joined from Salesforce where I was on their CPQ and billing team. So really have familiarity and expertise and most of the modules and systems that come up in these conversations. Prior to that, I worked directly at NetSuite for about five years.

So first off, what's the problem? Why do companies look to ZoneBilling to help them with some of their more complex scenarios? And it really comes down to four key areas. Over the past 20 or so years, subscription and contract management have really completely changed - from the way the contracts are constructed to the variables that are set up for each customer.

We went from fixed recurring subscription, standard SaaS, to more usage or consumption based billing, things like prepayments or minimum commitments. And it's become clear that a two-dimensional sales order is not going to be adequate to handle an ever evolving three-dimensional contract. And what you need is an orchestration tool that's really going to ensure that sales operations and billing and finance are all on the same page for both billing and revenue recognition. And that orchestration tool is ZoneBilling.

So why specifically ZoneBilling? Simply put, it is the most flexible tool that's completely built within your NetSuite ERP. And our customers save tons of time and money each month, and it allows them to be much more nimble and creative with how their contracts are set up. And we'll get into some of those more nuanced use cases today.

But all that to say also sales teams typically love ZoneBilling as well, even though they're not using it because they have ultimate flexibility with how they can close their deals as well. And because of that flexibility, we help to eliminate revenue leakage, help you recognize revenue faster, and we're continuously communicating with your NetSuite revenue module, whether that's ARM, advanced revenue management, essentials, or with allocations.

And because all of these transactions are connected, controllers, CFOs, billing teams are able to see that contract information-- your invoices, your upcoming charges and invoices-- all in one place where everything is completely reportable.

So I'm going to transition here into my demo accounts and we're in a standard NetSuite environment. So if you've seen the last two webinars I've done, you know, overview on subscriptions, where we fit within the platforms.

Really the key here is that we were 100% built within the walls of your NetSuite platform. I like to think of us as an additional module. If we were a part of NetSuite's organization, it would be very similar to calling up your account manager and asking to see a demo and then ultimately having different fields and records and scripts released into your environment. And you can see a lot of these records here. So we'll go through a subscription, which is really a contract, subscription items, so specifically what did your customer purchase, usage data, of course, we'll talk a little bit about revenue today.

And then two areas that I'll do live and manually, execution of rating, which basically means to do a calculation, and then create transactions here-- both areas that I always just like to call out, this can be completely automated. If we were to come over to our setup here, hover over ZoneBilling and find this automated processes dropdown, everything that we go through today, can be and typically is fully automated, but it's really up to you the level of automation that you want.

And then everything that you see on the screen here is powered by ZoneBilling using native NetSuite functionality for reminders and portlet reports, save searches and so on. And you can see some of our other products like ZoneCapture for vendor bills. And if I come down here to the bottom, you can even see a prepaid report. So where the customer is able to see what are their customers' individual contracts, percentages consumed? This is a report that's focused on gigabytes here, what the remaining dollar value is.

And a lot of our customers, if they do have these prepaid scenarios, we'll set up some automation here as well. Use native NetSuite workflows to say, anytime our customers get to 90% of their usage and they've consumed 90% of what they've purchased for the month or for the year or the quarter, we want to use a workflow, native NetSuite workflow to send out a reminder, for example.

So really what we're doing here is taking the foundation of NetSuite and extending the functionality with ZoneBilling. So I'm going to go ahead here and I'm going to jump into a customer record and we'll find a few subscriptions. I've got a bunch of different subscriptions here as we can see, again, a subscription is a contract because I work with customers who really have all different types of use cases.

In a real life scenario, you probably just have one subscription or one contract to one customer, but I split them out here by use case. So the first one we'll go through is a minimum commitment. But this subscription, again, is really my one stop shop to see everything that I have as far as this contract with this customer, my start dates, my end dates. I can see everything that's been purchased, historically, upcoming, and I'll also see my rate type.

So the rate type is really the first key differentiator that allows us to solve for lot of these challenges. Is it a fixed recurring item? Is it a one-time charge? Is it prepaid? And if it is prepaid, it prepaid in item quantity or more of a dollar value like we'll see here in a little bit?

And then the second one is going to be my charge schedule. And really what that does is two things. It defines my billing frequency, which is then going to generate all my future charges and give me the ability to forecast all my future charges. But it also clearly shows the relationship here between what the customer purchased and when they're being billed for.

So for example, we're going to go through a usage scenario here where the service period may be the month of January, but they're going to be billed in arrears on February 1st, for example. And let's open up my item record here.

So again, the rate type is really telling the system exactly what type of product is this and how we're going to treat this contract. So it's going to be usage based. The usage rate per gigabyte here is going to be $5. And there's going to be a minimum monthly charge here of $2,500. So if there's any sort of shortfall, we're going to want to charge the customer that, but also have some descriptive language in there so they know what they're being charged for.

And we use a charge item map in order to do that. This can be dynamic as well if you wanted to put the NetSuite field ID in here to show them, you know, this is what your usage was, this is what your minimum fee was, but this will then inject this language and any dynamic information that you need directly into those charge lines.

For my usage, we're going to have a quantity of 100 on the first, on the 15th, a quantity of 75, and then a quantity of 125 on the 30th. So it's really going to be a shortfall here from the 2500 and we'll see how Zone is going to recognize that as I hit the rate now button and charge the customer for the true up as we just saw.

So if I take a look at my forecasted charges, we'll see a few things have happened. We've brought in our usage with those quantities. We've multiplied that by $5 to get us to $1,500 here. It's recognized that there has been a shortfall, injected that language in here, and it's billed them the following $1,000.

From here, I'll go ahead and create my transaction. And you can see I'll again have a forecast of all those 2,500. And of course, if there was something that was above that, we would be billing them in overage.

And a native NetSuite invoice record is now going to be created. This takes just a minute to load here to create these invoices. So as we do that in the interest of time, I'm going to go ahead and jump into our second scenario here.

In this case, we're going to have a prepaid subscription. You can see my rate type is going to be prepaid and the customer is going to be purchasing $100,000 or 100,000 quantity for the entire year.

They will then be paying 1% of the total amount that's been spent. This is a dollar value versus an item quantity. And basically what Zone is now going to do is it's going to recognize when they have some prepaid usage, if there's any usage or credits that are left on their account, and draw down from that amount. So $50,000, $125,000, and $150,000 for a total of $325,000. Again, I'll go ahead and rate this.

And as I'm doing that, we can check out the invoice here that's been created for the previous example. So we'll have four lines, one for each of the usage lines here, one for my true up. Important to point out here that I could be using what we call a billing profile, either to combine multiple line items.

I also have the ability to sort or use subtotals. So if you have any customers who are asking you for a specific way that they want their invoices structured, we have a lot of great functionality there that we'd love to do a deeper dive on another demo for you.

We can see my usage has been brought in. For every one of these transactions here, there's going to be an equivalent offsetting charge, which is telling me internally, that the customer has already prepaid for this and they don't need to have another invoice that's gone out.

The other thing that we do here is help with revenue. So if you have these prepaid examples, NetSuite can be pretty tough to manage revenue. It's very manual. Every time there's usage, you have to manually update it. With Zone, we handle that for you. So we can see I've got two performance obligations here, my prepaid usage, that we're actually automatically the system is recognizing as the consumption happens. And at the same time pushing that deferred revenue that they've already paid for but haven't consumed into the last month.

So we'll see my one time posting that's been done for the actual consumption in January. And then we'll also see an end of contract rule which is something that's new with Zone, taking any remainder, and if it's a use it or lose it scenario, recognizing it in December of the same year.

All right, so I know that was maybe a lot in a short period of time, but we definitely would love to have a deeper dive. We do all custom built demos here. So we'd definitely like the opportunity to have a discovery call and ultimately build out a tailored demo. But really three main takeaways here. We allow our customers to save time and money with our flexible rate types and our charge schedules.

We also unite sales and billing teams with the flexibility that our subscription and our subscription item records give you to really allow you to meet any sort of complex billing use cases, whether that's tiered usage or prepaid usage or minimum commitments or prepaid usage with tiers on top of that. We see all different types of scenarios. And again, we'd love to learn a little bit more.

And then in general, we bring all your billing and revenue information inside your ERP. We saw that one example of a prepaid, which is very tough to do natively in NetSuite, and we fully automate that process.

So I'll go ahead and leave our website up here for a second. Would love to have a conversation, build out a completely tailored demo to you. But I hope that you enjoyed the webinar today, and hopefully see you next time. Thanks.