Building in quality as early as possible

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    Written by HarmonyPSA on 2014-01-20 Last updated 2018-06-27 - 2 minute read

Whatever you sell, if has to be delivered, invoiced and accounted for.  If it contains bought-in components, they also have to be ordered, shipped and paid for.  If it includes a support or period-based services element then that has to be accounted for over the service period and that means the deferred revenue accounting has to be right.  All these terms and conditions may be on your standard terms, they may be written on the order, expressed verbally, or they may be spelt out on the contract the customer/supplier executes.

If you work in the finance department, this can be a complete nightmare to control.  You have to coordinate delivery, PO’s, invoices, returned goods and accounting without actually being in charge of most of these processes.  Missing things is easy, mistakes are easier and customers who change their minds are common.  The sales team only care if it impacts their commission payments while operations teams only care about the techie stuff.  This is why finance departments in technology businesses tend to be quite large in proportion to the rest of the business.  The job is hard because finance spend their lives chasing information and remodelling.

At Harmony, we see the world differently.  The products are self-describing, they each contain a complete description of their individual terms and conditions.  Not only does this appear on the order, it actually drives both the processing cycle and the accounting.

But, that’s still not good enough.

We want quality built in from the beginning, so when a quote is raised, it also contains all these terms. Except in simple “sold from the price list” cases, the quote cannot be issued unless it’s approved.  This approval is not only to confirm the salesman is not selling the family silver, it’s there to make sure the product is correctly modelled, up front.

Now when the order finally comes through to finance, you know how to treat it and no remodelling is necessary.  This means fewer mistakes and nothing can possibly get missed.  The customers will still change their minds, but Harmony deals with that as elegantly as random acts can ever be covered.  And, deferred revenue is managed automatically, leaving finance time to add value, not chase data.

Harmony doesn't eliminate complexity, but it does the best it can to process it smoothly.

Contact us if you would like to know more.

 

About the Author: Harmony Business Systems Ltd (HBS) is the company behind HarmonyPSA, the most complete cloud PSA software on the market. Developed with functionality to cater for even the most complex needs of MSPs, VARs, ISVs and Professional Services organisations, HarmonyPSA truly is the next generation of PSA systems. HBS is an independent company based in the UK. Follow HarmonyPSA on


Tags: automatically managed deferred revenue, Business, deferred revenue accounting s, General PSA, standard terms

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