We talk to a lot of technology companies, different ones every day, both here, in the US and as far afield as Australia. Since we began this journey with Harmony, a discernable pattern is emerging that seemed worth sharing.
Many of the companies contacting us are MSPs, they know they need software to run their businesses and, more importantly perhaps, they realise that they neither have the time nor the desire to write their own software.
ISVs on the other hand often believe that no pre-built software will be flexible enough to manage their business and they can easily write something themselves to solve their internal control issues. So why would an ISV spend money on a packaged solution?
There are two key points where ISVs' businesses are more complex than most MSPs' and they both relate to the time value of revenue. The majority of MSPs bill monthly services monthly, meaning that all their invoices go straight to the P&L account when released. This straightforward way of working is why the software often used by MSPs can have a simple invoice interface with an accounting system.
If the time value of revenue is important, as it is from almost all ISVs, you need to consider how you control your deferred revenue account and how you ensure you have only claimed professional services revenue that you have earned, not invoiced. These two quite distinct problems rely in most instances on that accounting stalwart, manually updated spreadsheets. Not too tough until you have hundreds of customers and projects. Tracking changes to these many relationships and contract details drive increased headcount in finance departments and lead to billing and P&L errors. The problem is hard to control.
Even though we sell more to MSP’s, HarmonyPSA was actually designed to address the ISV market by automatically controlling the twin control aspects of deferred revenue management and work in progress accounting from the start, requiring a journal interface to do so. We also knew it had to be extremely flexible to model the wide range of contract types out there and join up the disparate data islands that best of breed thinking creates.
So, our message is don’t try to write your own control solution, focus on your core business and let us do what we do best.
*PSA – Professional Services Automation, ERP for services businesses
About the Author: Harmony Business Systems Ltd., a CloudBlue company, is the business behind HarmonyPSA, the most complete cloud professional services automation (PSA) software on the market. Purpose-built with functionality to simplify every need of MSPs and Professional Services Organisations, HarmonyPSA introduces a state-of-the-art PSA system built for today’s modern service provider. The platform empowers services organizations to scale recurring channel revenue and diminish operational complexity via its advanced product suite, which includes automated billing and reconciliation, an industry-leading customer support center and network operations center (NOC), real-time profitability analysis, and much more. HarmonyPSA is available globally. Follow HarmonyPSA on Twitter, LinkedIn or Website