SaaS Case Study
Yarkstik Automates Usage-Based Billing with Ordway
Scaling Revenue without Adding Headcount
Summary
Usage-Based Billing
Yardstik selected Ordway to automate its usage-based billing workflows and replace a spreadsheet-driven process that was becoming increasingly difficult to scale. With Ordway, Yardstik can support flexible pricing models, minimum commitments, detailed usage rating, and automated invoice generation based on screening and verification activity.
Integrations with Salesforce, Stripe and QuickBooks Online help to keep account, contract, revenue, payment, and billing data synchronized across the business. The self-service portal feature also allows their customers to retrieve additional billing support details as needed. Since implementing Ordway, Yardstik has been able to double revenue without having to add more headcount.
The client
About Yardstik
Yardstik is the creator of the Human Trust Platform, which enables organizations to perform various types of background checks and screenings for both new hires during the recruiting process and existing workers throughout their employment.
Understanding who is really in the workforce is a growing challenge for many companies as AI enables fraud and social media creates ongoing risk.
Yardstik provides a diverse range of screening services ranging from employment history and professional license verification to motor vehicle record and criminal background checks.
The challenge
Selecting a Usage-Based Billing System
Migration from QuickBooks
Originally, Yardstik was using several spreadsheets to calculate the line item charges then uploading them into QuickBooks to generate customer invoices. The process required a lot of manual effort and was not going to scale as Yardstik grew.
Futureproofing the Tech Stack
As a result, the finance team embarked on a project to find a new billing platform. They wanted a system that not only met the current needs of the business, but also would enable it for years to come. To ensure the sales team could continue to meet its growth targets, the company would need to be continually evolving its pricing models and contract structures, which requires a highly flexible billing system.
Ordway Selected for Flexibility
The finance team evaluated several recurring billing vendors but ultimately selected Ordway for its flexibility in usage-based billing.
“One of the primary reasons we decided to go with Ordway was the flexibility it offered around our end of month workflows and timing for usage-based billing.”
Kari Lemke
Controller, Yardstik
Implementation
Implementing the New Billing System
Ordway assigned a designated project manager to work with the Yardstik team on the implementation process. The Ordway team helped guide the finance team on how to configure all the key variables in Ordway, including the chart of accounts, revenue recognition rules, invoice templates, dunning email templates, revenue reports and the self-service portal.
Integrations and Data Upload
Integrations were set up between Ordway and other critical applications in the tech stack, such as the Salesforce CRM, Stripe and QuickBooks accounting. The last step was to migrate all the historical data for Yardstik’s current customers, including the contacts, contracts, invoices, payment transactions, and revenue journal entries.
Modeling Products and Pricing
One of the most complex aspects of the project was configuring the products, pricing, and plans. Yardstik had decided to remodel the way the products were configured before moving to the new billing system, which required a lot of rework of the existing customer contracts. The effort proved worthwhile, however. After implementation the company can now report much more effectively on product and customer level profitability.
Linking Billing to the Sales Process
To ensure that all the details about accounts, contracts, and products are always up-to-date in the billing system, Yardstik set up an integration with its Salesforce CRM system. Ordway offers a “plan picker” that makes it simple for Account Executives to select the products and packages they sold to a new customer.
CRM Billing Integration
When the opportunity is marked “closed won” in the CRM, the relevant details are published to Ordway. Using the account name, billing address and contract line items from Salesforce, Ordway generates an initial invoice along with a billing and revenue schedule for the contract lifecycle.
Benefits
Usage-Based Billing
Yardstik has a usage-based pricing model in which customers are billed based on the number of screenings and verifications performed in a period. At the end of each month metered usage data is collected from the Yardstik application and uploaded into Ordway. The rating engine sorts the usage records by customer and product then looks up the associated price schedule for each account. Line item charges are calculated for each customer and product which are then used to generate invoices.
Minimum Commitments with True Ups
In some cases, customers sign contracts with minimum commitments. These minimum commitment agreements require additional processing tracking to view the remaining balance at a point in time and determine the true up amount to be invoiced (if any) at the end of the commitment term.
Self-Service Portal
With usage-based billing models invoice amounts go up and down each month depending on the volume of services consumed. As a result, customers often want more detailed information about each invoice to understand the specifics of each individual charge.
Many of Yardstik’s larger customers want insights into which employees and candidates were screened for which types of credentials. To make it easy for customers to get the details about invoices, Yardstik offers a self-service billing portal powered by Ordway. Customers can view historical invoices, credits, make payments, and download usage details.
“We’ve been able to double our revenue without having to hire additional accounting staff.”
Kari Lemke
Controller, Yardstik
Revenue Recognition
Revenue Subledger
Revenue is recognized at the time specified in Yardstik’s accounting policies, which for usage charges is typically in the period in which the usage is consumed. Journal entries are automatically generated in Ordway’s revenue subledger for invoices, payments, credits, refunds, deferred and recognized revenue.
QuickBooks Integration
Yardstik set up an integration between Ordway and QuickBooks to ensure the general ledger has up-to-date by customer details for deferred and recognized revenue, and accounts receivable balances. The chart of accounts from QuickBooks is synchronized with Ordway’s subledger so the two systems can share journal entries as needed. Ordway offers an integration dashboard that helps Yardstik to troubleshoot any synchronization errors that occur between the two systems.
Summary
Scaling Revenue without Adding Finance Headcount
Since implementing Ordway, Yardstik has been able to automate most of its recurring billing, revenue accounting, and collections processes. Ordway has been able to support the growing needs of the business as topline revenue doubled and the company continued to introduce new products and acquire new customers. Perhaps, most importantly the finance team has been able to scale their operations without having to add FTEs to manage their billing and revenue accounting functions.
