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Precursive Pillars

REVENUE RECOGNITION & FORECASTING SOFTWARE FOR SALESFORCE

WHAT IS REVENUE RECOGNITION?

Revenue recognition is the process of understanding when your business has earned its revenue.


Companies that use a cash basis of accounting will earn revenue when the cash hits the cash register or bank account. However if your organization uses accrual based accounting then you will recognize revenue only when you have earned it. 


The revenue generating activity for SaaS companies is the delivery and usage of your product by the customer - this activity must be complete for that revenue to be included into a respective account period.


Revenue standards make up an important part of revenue recognition as a whole. It affects all or your existing contracts with customers, and it can have major impacts on the financial performance of your company. Read our blog on ASC 606 here to learn more about these standards.

FINANCIAL IMPLICATIONS OF DELAYED IMPLEMENTATIONS

To understand the true value of Professional Services, let’s explore what happens if the implementation is delayed.

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CASH FLOW IMPACT

1 month delay on a 3 month $50k implementation will mean $16.6k of delayed cash collection per delayed project.

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STAFF UTILIZATION

1 month delay to a 3 month implementation would lead to a 25% reduction in utilization for each fully utilized team member that can not be reallocated to other work over the course of the project.

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LOST REVENUE

1 month delay to a new client launch would mean $4.2k of lost revenue based on a $50k fee. With 50 new clients this could mean $208k of lost revenue.

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REDUCED PROFITABILITY

Good margin on SaaS PS is 40%. One months idle time caused by delays in implementation would be $10k of staff cost (for staff that can not be reallocated) for a 3 month $50k implementation.

WHY IS REVENUE RECOGNITION IMPORTANT?

Foremostly revenue recognition is a regulatory requirement of GAAP/IFRS and therefore it is vital to get this correct to ensure compliance. Getting this wrong can have different implications based on whether you’re viewing these as an internal or external stakeholder. If you're reading this in the UK and want to know more about the revenue standards closer to home, read our guide on FRS 102.  


Revenue/deferred revenue reporting is often one of the most important performance metrics monitored by the senior management of a business. It tells them your current earnings as well as expected earnings for the remaining period. Forecasting future revenue recognition correctly is critical for business planning. It enables management to ensure that the necessary resources required to deliver the revenue are in place. This all helps Finance Teams understand the company's current and predicted cash position, an important tool in financial planning. It is also a crucial factor in valuations when potential investors are interested in acquiring a stake of your business.


Incorrect revenue recognition can be viewed as fraudulent reporting and this can have negative effects on a company’s brand.

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"We knew we were spending a lot of time on overage or warranty work, with Precursive we can easily track this. This build in functionality and the ease of extending Precursive has been great."

POLSOURCE MAXIMIZED UTILIZATION THROUGH BETTER RESOURCE MANAGEMENT, AND REDUCED TIME SPENT ON NON-BILLABLE WORK BY 50% WITH PRECURSIVE

Brandon Marsee.

Senior VP of Finance & Operations | Polsource

PRECURSIVE MAKES REVENUE RECOGNITION EASY

Precursive is a Professional Services Automation (PSA) solution which is built on Force.com (native to Salesforce). Precursive is used by Consultancies and Professional Services teams in Software such as BetterCloud, Dealertrck, Gong and MX, to manage and improve all elements of service delivery.


Professional services, project management and implementation teams improve delivery times to pull forward revenue and accelerate time-to-value for customers. See how Precursive's software is the perfect fit for SaaS & IT companies.  


Precursive PSA helps companies to forecast and recognize revenue aligned to their business model. Revenue can be forecast and booked at a project level for fixed price, T&M and milestone based work. Precursive will automatically calculate revenue forecasts so you can see where you are at any given time. Finance teams can reduce the admin burden for period-end with a view of both recognized and deferred revenues. A solid delivery strategy is crucial to successful revenue recognition. According to our revenue recognition field guide, for an average ACV of $75,000, a one month delay over 100 customers could cost you $750,000+ in overrun costs. Precursive can help services teams and finance leaders avoid this.

IMPROVE REVENUE MANAGEMENT

Get more visibility and control over financial performance with better forecasting and recognition of services revenues.

Precursive Revenue & Profitability Dashboard
Precursive Platform Dashboard

OPTIMIZE SERVICES DELIVERY

Build repeatable delivery playbooks with templated project plans that include tasks, timelines, roles and effort estimations.

TRACK PROJECT MARGINS

Understand the costs, profit and margin of implementation packages and managed services offerings based on the time spent to deliver.

Precursive Revenue & Cost
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MAKE BETTER DECISIONS

With reporting on key operational metrics including delivery times, team utilization, project margins, time recording, and revenue.

FURTHER RESOURCES 

Forecast and recognize your business' revenue with Precursive PSA.

PRECURSIVE PSA

Learn more about revenue recognition and its methods for SaaS and PS.

PRECURSIVE BLOG

Master revenue recognition by downloading our useful field guide now.

PRECURSIVE TOOLKIT

Find out more about the people and company. You can learn more about what makes us tick. 

 

We are passionate about changing the game for the world’s best services teams. 

 

Our mission is to help you improve time-to-value and make every customer a success story.

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WHY PRECURSIVE.

About Us

Find out more about us including our mission, values and get to know the team

Salesforce Native

Give sales, services, support and customer success teams a single, shared view of the customer

Customers

Hear from customers on why they prefer Precursive to help them scale and grow their business

Professional Services Delivery

Our services team provides expertise in how the best companies improve services delivery

Support & Success Hub

Find the answer you need at our success-hub where you will find a mix of documentation, video assets and training materials

The Precursive Platform is 100% native to the Salesforce platform. Our solutions can be tailored to your needs and support a range of use cases.

 

Learn how we take the pain out of complex service delivery activities. 

 

Do the work, not the admin! 

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Professional Services Automation

Increase operational efficiency with predictable services delivery and insights on performance

Project Management

Powerful project management capability designed to support high-velocity services delivery

Resource Management

Quickly mobilize your project teams, manage demand and avoid capacity crunches

Customer Workspace

An interactive community portal to collaborate, share dependencies and updates in real-time

Services Billing

Easily manage accurate professional services billing, raise invoices and track payments

Revenue Management

Recognize and forecast revenue with ease and accuracy

Precursive AI ✨

Leverage AI capabilities for better project management and boosting customer success. 

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Get actionable tips and insight on customer onboarding, resource management and professional services automation via podcasts, blogs, whitepapers, product guide videos and our on-demand webinars.

Blog

A vault of knowledge from in-house & guest writers

Playbooks

Repeatable & scalable insight on a platter

Product Guides

Video guides for the Precursive Platform

Research

Industry trends and benchmarking

Podcast

Listen to all episodes of ‘Precursive Perspective’ with host Jonathan Corrie

Toolkits, templates, tips and more 

Events

Stay in the loop of what Precursive is up to

Webinars

Watch anytime, anywhere, on-demand

BY SOLUTION.

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PROFESSIONAL SERVICES AUTOMATION

Manage people, projects and revenues in one place

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RESOURCE MANAGEMENT

Staff projects faster with resource planning

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PROJECT MANAGEMENT

Improve your implementation experience

Professional Services / Services Delivery

Organize work and collaborate with customers

IT & Professional Services 

Project Manager

Easily manage timelines and dependencies

Implementation Teams

Organize work & collaborate with customers

Resource Manager

Forecast demand and avoid capacity crunches

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