SaaS Case Study
CaliberMind Automates Revenue Recognition
Marketing SaaS Platform Migrates off Spreadsheets
Summary
Automating Revenue Accounting
CaliberMind selected Ordway to replace spreadsheet-based billing and revenue recognition processes that had become difficult to scale with the company’s growth. Ordway’s billing engine generates the invoices for CaliberMind’s recurring subscriptions, professional services, upsells, and renewals.
It also automates the revenue accounting including the creation of deferred revenue schedules, and adherence to ASC 606 accounting policies. As a result, CaliberMind has reduced the time required to perform accounting and improved its accuracy, which enables the finance team to focus on more strategic activities such as forecasting and planning.
The client
About CaliberMind
CaliberMind provides a GTM intelligence platform that unifies complex marketing and sales data to help B2B organizations understand how go-to-market activity contributes to pipeline and revenue. Its capabilities include multi-touch attribution, marketing analytics, ABM insights, account scoring, buyer-journey visibility, sales signals, and marketing mix modeling. By connecting fragmented data into a more reliable operating view, CaliberMind helps enterprise marketing and revenue teams make investment, prioritization, and performance decisions with greater confidence.
“Our accountant would need to spend 30% more hours managing our revenue recognition if we did not have Ordway.”
Jennifer Pearce
Fractional CFO for CaliberMind
(Managing CFO & CFO Team Leader at AVL Growth Partners, an Amplēo company)
The challenge
Selecting a Recurring Billing System
Migration from Spreadsheets
Prior to automating the subscription billing and revenue recognition processes with Ordway, CaliberMind was using spreadsheets. As the company grew and added customers, spreadsheet-based accounting became increasingly time-consuming and difficult to scale.
Billing System Evaluation Criteria
The company’s fractional CFO partner, AVL Growth Partners, an Amplēo Company, initiated a project to evaluate technology vendors to support its billing, collections, and revenue accounting needs. The key selection criteria, in addition to product functionality, were pricing, ease-of-use, and integrations. CaliberMind selected Ordway because it was price-competitive and more user-friendly than others, such as Maxio (SaaSOptics).
Sales to Finance Handoff
Salesforce CRM Integration
One of the areas of focus for the project was automating the handoff between sales and finance for new customer wins. The CaliberMind team integrated Ordway with its Salesforce.com instance. Ordway’s CRM adapter, is tightly integrated with the Salesforce UI, acting like native functionality. As the sales team pursues new deals, they can create Salesforce opportunities that utilize products and pricing data synchronized with the billing system. Once a deal is marked closed, the key details from the opportunity are pushed to Ordway, including the account name, billing contact, products, prices, and payment terms. Ordway automatically generates a contract record, a billing schedule, and a revenue schedule.
Subscription Billing
Many Contract Variables and Pricing Models
The subscription billing software uses data from each customer’s contract to determine line-item charges for each account and the billing frequency. The bulk of the company’s products, including its core marketing applications and managed services, have fixed fee subscription pricing. However, the company also offers professional services, which are typically one-time, non-recurring revenue. As many SaaS companies do, CaliberMind offers a flexible range of different contract structures and pricing models to optimize its sales win rate and new customer acquisition.
Mid-Contract Billing Prorations
In addition to acquiring new accounts, CaliberMind also places a big focus on growing existing customer relationships by upselling and cross-selling new products. These upsells boost expansion ARR and net revenue retention. As upgrades and renewals are processed, the modified contract details from Salesforce are fed into Ordway, which triggers updates to the billing schedule and an additional invoice, if necessary. Many upgrades occur during the term of an existing subscription and there is a need to perform complex calculations to determine the prorated charges for the time remaining in the contract term.
Multi-Channel Payment Collections
Payments are primarily collected electronically through ACH and wire transfers, with a few large accounts paying by check. Most customers use an accounts payable workflow to review, approve, and disburse funds rather than an auto-pay model with a credit card on file.
“The best part of Ordway is that we finally have a system to do all the complex revenue math for us, which is awesome and allows finance to focus on more strategic activities like revenue forecasting and investor reporting.”
Jennifer Pearce
Fractional CFO for CaliberMind
(Managing CFO & CFO Team Leader at AVL Growth Partners, an Amplēo company)
Revenue Recognition Automation
In addition to billing, Ordway automates revenue recognition for CaliberMind. As new customers are acquired and fed from the CRM system, Ordway creates the associated revenue schedules.
Deferred Revenue Schedules and Contract Modifications
Subscription contracts with upfront payments have deferred revenue schedules automatically generated in accordance with the company’s accounting policies and ASC 606. CaliberMind follows a daily revenue recognition model, reporting GAAP revenue based on the actual number of days in the month (e.g., 28 for February) rather than recording the same amounts for each month in the contract. As contract modifications such as upsells and renewals are made, Ordway automatically updates revenue schedules and creates new journal entries to reflect the changes.
QuickBooks Online Integration
Journal entries are pushed from Ordway’s revenue subledger into CaliberMind’s general ledger, QuickBooks Online. The GL synchronization ensures that all the relevant details about deferred and recognized revenue, invoices and payments, credits and refunds, and accounts receivable balances are reflected on the company’s income statement, balance sheet, and cash flow statement.
Benefits
Reduced Time to Close and Higher Accuracy
With Ordway, the CaliberMind team has been able to significantly reduce the amount of time spent managing revenue accounting as compared to the prior approach using spreadsheets. Accuracy is another benefit. With Ordway performing the accounting calculations and generating the journal entries, the element of human error is removed from the equation.
Improved Accuracy over Spreadsheets
There is less risk of data being entered incorrectly by the finance team because it flows directly from the contract in the CRM system, which was carefully reviewed by the sales team and the customer before signature. There is a lower probability that formulas are incorrect or out of date, as commercial software undergoes automated regression testing and quality assurance protocols before each new release.
Controls and Audit Trail
Built-in controls and automated logging provide an audit trail on who changed what and when. Auditors typically prefer accounting software over spreadsheets for these reasons. It is especially important for revenue, which is typically one of the focal points of any financial audit.
