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Common Use Cases for Zuora Revenue Variable Considerations

By Lana Lee posted 15 days ago

  

On May 16th, the Zuora Community was joined by Senior Director of Product Management Nikki Wong who shared some common use cases for Zuora Revenue Variable considerations along with a Revenue Tool Tip on Reporting - Historical Waterfall (Actuals).

View Presentation | Watch Video

 

Revenue Tool Tip: Reporting - Historical Waterfall (Actuals)

Watch video to learn more

 

This tool tip introduces ​​an enhancement on release on our waterfall.

Historical Waterfall

Waterfall Type

  • Revenue, Billed Revenue, Unbilled Revenue
  • Adjustments, 
  • Contract Impairment (with release 37.017.01)
  • Net Revenue

Waterfall Types Not Supported

  • Cost, VC

Currency Types

  • Transactional
  • Functional
  • Reporting

Number of Periods

  • Up to 13 Periods (full financial year coverage)



Cost Management Case Studies

Watch to learn more | KC Reference: Cost Processing

 

Use Case #1: COGS - Standard Cost

Watch to learn more

Business Scenarios: Company A is selling hardware with subscription.  

  • Company A record deferred COGS when hardware is shipped and invoiced.
  • Company A recognize COGS when hardware is delivered.


Use Case #2: Direct Cost - Other Cost

Watch to learn more

Business Scenarios: 3rd Party Cost

  • Company A hosts their SaaS product on AWS.  AWS charges usage fee on per GB. 
  • Company A estimate their AWS cost per month by GB

Business Scenarios: Referral Fee

  • Company A pays XYZ company for referring business with Company B.  On contracts with Company B, the referral fee is listed.

Business Scenarios: Commission

  • Company A‘s salesperson receives a 5% sales commission on each contract that he or she obtains.
  • Renewal is not entitled for sales commissions
  • Company A set the policy that commission accrual when contract is signed and commission will amortize over the contract term.

Business Scenarios: Gross Accounting

  • Company A is selling a subset of their product through Company B.  Company B only acts as a sales agent.  
  • Company A owns the support and maintenance of the product for the term of the contract with the end customers. 
  • Company A is deemed to be the principal and recognize gross revenue and record partner fee.
  • Company B is to collect the cash from the End Customers.


Use Case #3: Cost - System Setup

Watch to learn more

For Zuora Revenue to process and report on costs, you must complete some setups in Zuora Revenue.

  1. Set up cost-related accounts, which is the prerequisite for all types of costs. See Accounting setup.
  2. Create all required cost types, and optionally create cost formulas and cost rules for the costs to be calculated based on formulas. See Policy setup.
  3. Modify the POB templates to specify the cost treatment information. See POB template setup.


Use Case #4: Cost & Variable Considerations - Automation Benefits

Predictable Revenue Reporting

  • Positive Variable Consideration aligns with revenue recognition.  This helps reduce sudden up and down on the revenue stream.  i.e. Consumption use case

Predictable Revenue Reporting

  • Cost or Negative Variable Consideration will align revenue recognition.  Ensure reduction of revenue is not hit immediately.  i.e. Rebate, Gross/Net Accounting

Increase visibility on other teams impacting revenue

  • Variable Consideration may apply to non-revenue areas but still impact revenue reporting.   i.e. Collectibilty

Increase accuracy on FP&A modeling

  • Cost or Variable Consideration aligns with revenue recognition, allows FP&A team to easily model and provide maximized strategy on any Reseller Program or Consumption Revenue

Flexibility to create Policy

  • Zuora Cost or Variable Considerations allows end users to design policy with flexibility to support operations.

Include / exclude for SSP allocation / analysis

  • Zuora Variable Considerations allows companies to include or exclude the VC amount in transaction price for SSP allocation and/or performing of SSP Analysis using the SSP Analyzer.

 

Release 37.017.XX - Manual Edit SSP and Mass Action

Watch video to learn more | Zuora Revenue 37.017.00.00 Release Notes

 

Manual Edit SSP - User Experience

Watch video to learn more

Earlier, the system did not override any changes made manually to the SSPs, resulting in inaccurate accounting since the extended SSP remained the same in the prospective calculation. With this release, the system will adjust the value of the Extended SSP based on the POB's recognized percentage when you manually edit the SSP. This change will ensure accurate accounting for the prospective calculations.

 

Manual Edit SSP

 

 

Manual Edit SSP

 

Manual Edit SSP

 

 

 

Mass Action

Watch video to learn more

 

Mass Action

What’s new: 

  • More robust filter condition
  • New labels column for mass action fields
  • Ability to add 20 attributes value can be updated in one batch
  • Ability to provide dates for rec and def action
  • Trigger of contract modification for change in CV eligible flag
  • Ability to apply and release of holds at POB level

Stay Up-To-Date with Revenue Releases and Maintenance

By joining the Zuora Revenue Notifications community, you will receive emails about Revenue Maintenance and Release Notifications including deployment schedules, the release window, and issues fixed.  Future sessions are announced monthly in the Community News where you can also hear about other product updates and other exciting events. 

Please subscribe by following these steps.

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