Bramasol RAR presentation.pdf
Transcript of Bramasol RAR presentation.pdf
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1/21/2016
TheNew
Deferred
Accounting
Standards
RARInAction
Ourspeakerstoday:
ChrisRitterhern
HansChristianMetz
JohnFroelich
January 21, 2016
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Followus:
Twitter:@Bramasol
www.bramasol.com
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Welcome Todays Speakers
30+ yrs Business Systems experience 25+ yrs. Focused on Finance &
Operations Solutions
10+ Years at [email protected]
CHRIS RITTERHERN
DIRECTOR SOLUTION ARCHETICT
Hans Picture
15+ years managing complex integration of accountingand SAP ERP
HANS-CHRISTIAN METZ
SR. LEAD CONSULTANT & ARCHITECT
OurModeratortoday:
JohnFroelich
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Whowe
are
Background StrategicSAPRevRecConsultingPartner
SAPGold
Partner
founded
in
1996
as
the
firstChannelPartnerinNorthAmerica
100+ConsultantswithanAverageof10+
yearsofexperience
SupportandAMS ServicesandSupportExperts
SAPCertifiedPCOESupport-(24x7AMS&SupportCoverage)
Supportfor
ECC,
S/4HANA,
and
Analytics
Vision ThoughtLeaderswithtightIntegrationtoSAP
TheLeaders
in
SAP
Revenue
Recognition
75%ofSAP1.0RampUps
TightLinkagestoSAPDevelopment
NumerousPOCs,workshopsandconsulting
projects
Transformation FocusedonOfficeoftheCFOSolutions
TrustedSAPRampupCoaches
TestingofRevenueAccountingSoftware
Workingdirectly
with
Revenue
Recognition
DevelopmentinGermany
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#1HowRAROperates
#2The
new
before
&
after
businessprocess
#3Benefits
to
your
company
RevenueRecognition
Whatyouwillsee?Revenue
Recognition
Whatyouwillsee?
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#1HardwarewithService&Subscription
#2
Intellectualproperty
with
auto
generated
billing
lines
TodayYouWillSeeTwoScenariosTodayYouWillSeeTwoScenarios
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Akeymessage
Todaywedlikeyoutoseetheimpact
of
RAR
In
Action
&
how
it
helps
your
business
Todaywedlikeyoutoseetheimpact
of
RAR
In
Action
&
how
it
helps
your
business
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Revenueisrecognizedwhenacustomerobtainscontrolofa
goodorservice.
Acustomerobtainscontrolwhentheyhavetheabilityto
directtheuseofand/orobtainthebenefitsfromthegoodor
service.
WhatisRevenueRecognition?WhatisRevenueRecognition?
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NEWRevenue
Recognition
Accounting
and
Reporting
AffectingAllRevenueContracts(IFRS15,FAS201409)
FinalstandardpublishedMay2014
Effectivedatelatest2018/9*(earlyadoptionpossibleforIFRSpreparers)
Newsingleprincipled5stepmodel
(SSP)forrecognizingrevenue
- Disclosurechanges
include
both
quantitative
andqualitativeinformationabouttheamount,
timing,anduncertaintyofrevenuefrom
contractswithcustomersandthesignificant
judgmentsused
Allcompanies(publicandprivate)willberequiredto
preparetheir
revenue
contracts
now
to
comply
with
thisnewregulationby2018/9*
1 Identify the contract with the customer
2 Identify the separate performanceobligations in the contract
3 Determine the transaction price
4 Allocate the transaction price to theseparate performance obligations in thecontract
5 Recognize revenue when (or as) a performanceobligation is satisfied
*The revenue standard will be effective for annual reporting periods beginning on or after January 1, 2017. Early
application will be permitted in IFRS countries. On April 1, 2015, FASB proposed to delay the effective date by 1
year to 2018 and permit early adoption under US GAAP. The IASB followed on April 29.
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WhatisaPOB?
POB
Defined:
Underthenewregulation,ASC606,a
performanceobligationisdefinedasapromise
totransfer
agood
or
service.
Aperformanceobligationissomethingthatcan
beexplicitlystatedinthecontractoritcanbe
implied.
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Scenario1Our
Product
Sell
Scenario
Today
Item (aka Material) SSP% of
BundleRSP
SSP for Media Device when purchased on it's own $200.00 62.50% $124.38
SSP for Media Service at $20 per month at six months (price
when purchased alone & not part of a bundle or a deal)$120.00 37.50% $74.63
Total $320.00 100.00% $199.00
Recognized monthly subscription is $74.63/ 6 months: $12.44
RARVersion1.1beingused
inour
AWS
Demo
&
POC
Cloudenvironment
RSPRelativeSellingPrice
Selling an inclusive 'Media Device' .
'Deal'includes the first six months of subscription which usually
cost $20 per month.
$199.00
This means, that from a revenue recognition perspective, we
recognize a) The actual value of the Media Device, in this case
when activated
b) The value of the Media Device is subtracted from $199
and the reminder is divided across 6 months and then
recognized on a time basis
Breakdown o f that statement (by our convention):
End Media Device value for this 'deal'
($199 less subscription costs) $109.00
Final Media Service monthly value ($15 times 6 months) $90.00
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FlowDiagram
Transaction
Layer
to
RAR
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SAP ECC
ver 6.0
EHP 7
SAP RAR
ver 1.1
BramasolsDemo
Environment
AWS
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SowhatdoesSAPRevenueAccountingLookLike
Scenario1HardwarewithService&Subscription
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Letstakeacloserlookatsomeofthe
numbers&screensthatwentbyduringour
livedemo..
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TransactionalSales
Contract:
Deviceincludes6
monthsofservice
subscription,whichis
valuedat
$15/month
if
purchasedonitsown
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Utilizingthe
Auto
generated
Installment
Plan
in
SAP
Monthlysubscription
autogeneratedeach
onebecomes
aPOB
Contractsubscription
start/stopdates
BTW: Contractcanbe
lateramended&will
auto
update
RAR
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TransactionSystem
Items
to
Transfer
to
RAR
Deviceplus
6months
ofsubscription
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RARContract
Created
both
IFRS
&
GAAP
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RARContract
Revenue
Picture
Before
Activation
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RARContract
Revenue
Picture
After
Activation
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RARPostingbackto
Transactionsystem
ThenaRARsystemposting
runmakesthefollowing
adjustmentsautomatically
backtotheTransaction
systemGeneralLedger
TransactionSystem
General
Ledger
Posting
Results
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RARMirror Contract
By
POB
Type
Media Device
Monthly Subscription
Media Device Monthly Subscription
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ReconciliationAudit
Revenue
and
G/L
Userscanlookbackandeasilyauditpostingissuesusingvarietyofcriteria
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SAPRevenueAccountinginAction.
Scenario2
Intellectualpropertywithautogeneratedbillinglines
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Scenario2 Intellectual
property
with
auto
generated
billing
lines
Inthisscenario,itwasagreed,byconventionthatmultipletermsforthe
sametitlewouldberepresentedontheirowncontractline.
Thisalsoallowedforlatereaseofchangeonshowdates&durationduring
theparticularviewingseason
Line Item# Item DescriptionTerm
Start
Term
End
Term
Months
Accounting
Basis RuleList Pri ce Total SSP
POB
Lines
1 Title1 A Great Movie 3/1/15 2/29/16 12.0 TIME $1,000,000 $1,000,000 12
2 Title2 The Current Movie 8/1/14 7/31/15 12.0 TIME $900,000 $900,000 12
3 Title2 The Current Movie 6/1/16 5/31/18 24.0 TIME $1,800,000 $1,800,000 24
4 Title3 We're The Smith's 1/1/14 8/17/14 7.0 TIME $250,000 $250,000 7
5 Title3 We're The Smith's 9/17/16 10/31/16 3.0 TIME $250,000 $250,000 3
Total 58
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SAP ECC
ver 6.0
EHP 7
SAP RAR
ver 1.1
BramasolsDemo
Environment
AWS
SAPLumiraCloud
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SowhatdoesSAPRevenueAccountingLookLike
Scenario2
Intellectualproperty
with
auto
generated
billing
lines
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TransactionalSales
Contract:
Noticeonly5contractlines
RARMirror Contracthas50+POBlines
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RevenueContract
Quick
Look
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RevenueContract
Revenue
Schedule
in
Total
Recognizableaswemarked
thateligibletobebilled
(transferred)when
the
contractwascreated
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Sofor
Scenario
2we
saw:
ARARcontactof50+POBlinesautogenerated
Anexampleofunitpricingthatisbilledmonthlyasis
HowDashboardingcanhelpshowaveryclearRAR
revenuepicture betterinsighttotheprocess
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Bramasol
GeneralProof
of
Concepts
Steps
Determinetheoverallimpacttoyourcompany
Quick
comparison
to
the
standard
Faststartinformativestyle,webelievethatknowledgeispower
Evaluatealternatives,pursuedesignthinking wherereasonable
NextSteps
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BramasolsProof
of
Concept
Approach
for
Revenue
Accounting
Confirm Overall
RequirementsActivi ty 2
Business Process
WorkshopsActi vi ty 3
BP Deployment
Review workshopActivi ty 4
FinalDocumentationActi vit y 5
Activi ty 1Initiate PoC,
Scheduling, etc...
Teammembers,keystakeholders,resourceavailability
EstablishPOCEnvironment&Access(Cloudaccelerationpossible)
BusinessProcessReview(superset)
DepartmentsInvolved,EstablishWorkshopCycles
Discusscurrentrevenuescenarios
IdentifyRARsolution
Process,Configuration,
Custom
Rules
Workshop
Cycle BusinessProcessdocumentation
Finalanalysis
Roadmaptoproduction
Developfirst
cut
for
production
plans
ReviewoverallBusinessProcesslist
Evaluate&discussPOCresults
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Workshops
Exampleof
the
Process
Iterative
Approach
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WhatWe
Learned
Today
SAP RAR Module is smoothly integratedOne.
We can utilize RAR for different type of
business scenarios
Two.
Engage with a partner who knows how to
extend the paradigm better user
acceptance
Three.
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BusinessBenefits
ofthe
NewRevenue
Accounting
Insightsintotheimpact
ForKey
Stakeholders ForITManagers
Gaintransparencyrequirements
Ensurealignment
Insightsintotheimpact
CommonPlatformwithknown
solution
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UsingSAPs
newRAR
capability,
gives
us
Visibilityintorevenue
contractsexposure
Contractsummary
generationforAudits
Leveragecontracts,
accountingpolicy,and
marketdataasinputs
Analyzeprofitabilityvia
SSP
Unifiedcollectionof
leasecontract
data
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