Over the past year, nonpublic companies have been scrambling to prepare for the new ASC 606 accounting standards that take effect in 2019.
The biggest impact is centered around how revenue must be recognized and reported. There are significant changes, especially for those with subscription offerings because of the many billing events that take place throughout the life of any given subscription. Companies that are ill-prepared will soon face increasing tension between go-to-market and finance teams, overly complicated spreadsheets, time-consuming roadblocks, and even costly audits/fines.
At Chargify, our mission is to equip teams to bill for what they want—not what they are limited to—giving companies the ability to pull more levers and get more creative with their offerings. But as a result, this creativity creates more reporting and accounting complexities, which will be intensified under the new standards.
We initially set our sights on building a scalable, compliant solution that could keep pace with our customers’ complex, ever-changing needs.
While scoping the project, we discovered ProRata, who had built a powerful revenue recognition integration for QuickBooks and Xero. We connected with their team and were impressed by their knowledge, experience and flexible approach to reporting automation.
The conversations quickly progressed, and we concluded that it was an obvious fit for many reasons:
- ProRata shares our “there is no one-size-fits-all approach to recurring billing” mentality with their revenue recognition reporting.
- Our platform is purposely designed to help every team within an organization to work smarter, and ProRata’s reporting would add a ton of value for finance teams.
- Instead of releasing basic, unpolished reports like many subscription billing vendors have done, the acquisition would allow us to bring a cutting-edge solution to market much faster. It was the best outcome for our customers.
We understand that time is of the essence, and work is well underway to seamlessly integrate ProRata into Chargify. We’re excited as we look forward to 2019, where flexible billing should be your #1 advantage, not your #1 accounting headache.