Reporting and Budgeting for Subscriptions in Microsoft Dynamics 365

An increasing number of companies are adding subscriptions as one of the revenue models to their business. Two different examples of this service include:

Netflix, which is a 100% subscription-based company focused on B-to-C, or business to consumers.
Microsoft, which originated in an era where software sold as one-time licenses, has today become an increasingly subscription-based software provider, with most of their software delivered in a software-as-a-service (SaaS) model using their Azure cloud.

As companies begin to adopt subscription-based revenue models for their customers, accounting departments and finance teams find themselves in a new struggle. Tasks that once were relatively easy in a world of “one and done” sales deals, like invoicing, reporting and analysis, and budgeting for various types of subscription contracts can now be quite complex and time consuming. On top of that, companies now have to deal with monthly, annual and multi-year subscriptions. Other challenges center around existing customers and adding to or removing from their contracts, as well as, customer churn (cancelled subscriptions), and other complexities. However, today’s customers using Microsoft’s two cloud accounting systems, Dynamics 365 Finance and Dynamics 365 Business Central are in luck. A Canadian software vendor by the name of Binary Stream has developed an add-in module called “Subscription Billing Management” (SBM), which in short allows accountants to elegantly manage their subscription contracts right within their Dynamics ERP system. So, What About the Reporting, Budgeting and Forecasting for Subscription Data? In collaboration with Binary Stream, the U.S.-based company, Solver, has expanded its Microsoft Dynamics 365 Finance and Dynamics 365 Business Central integrations to include key information from Binary Stream’s Subscription Billing Management app. Solver is a modern Microsoft Azure-based, multi-tenant cloud solution that automates and streamlines reporting and planning processes. It is often referred to as a Corporate Performance Management (CPM) solution. With Solver integrated to the Dynamics ERPs, as well as the Binary Stream app, customers benefit from financial and operational reporting that includes their subscription data, all in one single cloud portal. Furthermore, they can use Binary Stream SBM’s subscription data as a basis for single and multi-year revenue forecasts. What are Examples of Subscription Reports and Budgets? The following are examples of specific reports and budget input forms created in Solver and based on actual subscription data flowing in from the integration available through Binary Stream’s SMB for Microsoft Dynamics app. This first example shows a multi-year forecast going up to 10 years into the future. Based on the drivers seen in the yellow cells in the top left corner, the user can quickly generate monthly and annual subscription revenue forecasts.

Multi-year subscription revenue and churn budgeting and forecasting with monthly detail

When it comes to reporting, a flexible report writer like the one in Solver, can provide a multitude of report types to slice and dice subscription related data by metric, customer, and product. The report below shows monthly recurring revenue (MRR) with metrics for new sales, upgrades/downgrades and churn. It also shows the monthly trend for the ending MRR.

Dashboard analysis of subscription metrics like MRR and Churn

The report below shows a chart and data on an eight-quarter rolling basis. This makes it easy for users to analyze subscription revenue over multiple years. Any individual quarterly column can be expanded to display detail for the three underlying months.

Eight quarter rolling subscription revenue report with monthly detail

The Scheduled Billing report example seen below can be run for any given period. It helps accountants see the specific payment status per invoice per customer, including total, balance, deferred and recognized amounts.

Scheduled billing report showing recognized and deferred revenue per customer

Sometimes the finance team needs to analyze deferred revenue by customer. The example below shows deferrals by month for the remainder of the current year and then displays the summary for the next three years into the future.

Multi-year deferred revenue by customer report for the next three years

In conclusion, as a company with a subscription-driven business model, you have a solid cloud-based accounting system with Microsoft Dynamics Finance or Dynamics Business Central. When adding Binary Stream’s app for Subscription Billing Management, you get a specialty add-in that is completely focused on helping you manage your subscriptions. By connecting Solver’s cloud-based reporting and planning solution, you now have a best-in-class suite to not only help with day-to-day accounting and analysis, but can also keep a keen eye on the future with world-class budgeting and forecasting functionality.

TAGS: Reporting, Forecasting, Analysis, Budgeting, ERP, Dashboards, Partners, Industry