OneDay Automates Complex Parent Child Billing

Parent-Child Billing Hierarchy

Customers have a wide variety of billing preferences.  Some customers want consolidated invoices – at the parent level.  In these cases, the charges for all the locations are all combined onto a single invoice.  Other customers prefer split billing at the child level with individual invoices are created for each different location. Invoicing at the child level introduces a lot of complexity as the finance team needs to:

Multi-Jurisdiction Tax Calculations

Sales taxes can also get complicated for customers with large portfolios of properties.  Typically, the properties are distributed across multiple jurisdictions, each with its own tax rates, sales thresholds, and exemption policies.  Each of the parent and child invoices has to reflect the applicable online sales taxes for the respective locations it covers.

Midcontract Prorations and Adjustments

OneDay typically signs annual contracts with its customers.  In the span of a 12 month term, a senior living or multifamily company might make several changes to its portfolio, adding or divesting properties to optimize investment returns.  These types of changes drive complexity into the billing process, such as the need to:

Limitations of QuickBooks and Chargebee

OneDay had used both QuickBooks and Chargebee for billing and revenue recognition in the past.  However, the team found it cumbersome to manage the larger parent-child hierarchies and sales tax calculations within those applications.  Complicated manual workarounds and time-consuming data entry procedures were needed to perform new customer onboarding and monthly billing processes.

Spreadsheets for Revenue Recognition

OneDay has a mix of different revenue streams that it needs to account for under ASC 606 GAAP accounting for customer contracts, including:

Each of these require different approaches to tracking deferred revenue.  The finance team was using spreadsheets for revenue accounting, which was not a scalable, long-term approach.  Most auditors prefer that a commercial software application be used to account for revenue.

Faster Customer Onboarding

With Ordway subscription billing software in place, the finance team can onboard new customers much faster.  With other billing systems, child accounts needed to be entered individually (line by line) or in small groups.  Ordway’s bulk import capabilities streamlined the process and significantly reduced the time required to set up contracts.

Parent-Child Billing

Ordway has been able to automate the complex parent-child billing arrangements needed for the senior living and multifamily customers.  As a result, OneDay can provide customer-friendly billing in the groupings and formats that their large accounts prefer.  

Sales Tax Calculations

With Ordway, the sales tax calculations are integrated into the invoicing process as well.  During a billing run, Ordway makes an API call to Avalara to calculate the tax amounts based on the street address and product category, then inserts them into the appropriate child or parent invoice.

Payment Collections

Payments are collected through various channels and applied to the appropriate account balance.  Ordway integrates with FiServ’s CardConnect gateway to enable customers to set up recurring billing with autopay or one-time payments via “Pay Now” links.

ASC 606 GAAP Accounting

OneDay was able to migrate away from spreadsheets and adopt Ordway’s revenue recognition module.  Ordway automatically generates deferred revenue schedules for contracts billed in advance.  Journal entries are automatically created as invoices are issued, collections are made, and performance obligations are satisfied.

Detailed journal entries are uploaded into QuickBooks and consolidated in the general ledger to create the income statement, balance sheet, cash flow statement, and other reports.  The automated process ensures that OneDay’s financial reporting is aligned with ASC 606 GAAP accounting principles for revenue recognition of customer contracts.