Your Spreadsheets Are Leaving Money on the Table Every Month, and There's an Easy Fix
Some cloud-based vendors are able to implement a system that tracks and meters all channel sales and interactions—hardware, applications and/or subscriptions—in real-time. Unfortunately, this type of system isn't feasible for every vendor. The rest of the marketplace has to rely on a self-reporting structure for distributors and resellers, typically based on submitting spreadsheet data. These self-reporting spreadsheets create a number of significant problems:
1. Time-Consuming, Error-Prone Manual Work
Every month, service providers complete a spreadsheet with their own records listing what they used or purchased. The spreadsheet is sent up to the distributor (aggregator), who reviews the data and then aggregates it with the spreadsheets from their other SPs. The compiled spreadsheets are then delivered to the vendor to place an order. This manual data entry, review and compilation process takes excessive time at all levels of the channel, and the interaction with many people throughout the channel makes spreadsheet reporting highly susceptible to data errors.
2. Unreliable Forecasting
The time required to get the reporting data from service providers into the vendor's system often takes 20-60 days. It is nearly impossible to establish accurate forecasting with such long delays and rampant data errors.
3. Quote-to-Cash Delays
The slow manual processing of spreadsheets delays when vendors can book and invoice, which means that revenue can be pushed out weeks or months. The quote-to-cash period is too long, which impacts cash flow, delays commission payouts, etc.
4. Revenue Reconciliation
Most companies don't have the resources to sort through and manage all of these spreadsheets. As a result, many companies resort to billing only for the SP's minimum commitment. This often leaves money on the table and makes it nearly impossible to reconcile sales to revenues.
5. Regulatory Concerns
Regulations such as those under Sarbanes-Oxley require companies (especially pre-IPO companies) to reconcile what was invoiced with what was consumed. The flaws inherent in spreadsheets and the difficulty of accurate reconciling revenue can create serious problems with any relevant regulatory bodies.
While spreadsheets are commonly used, they are less than ideal for processing channel-based transactions. The solution to this complicated, error-prone system is an easily accessible reporting and billing platform that provides a central hub for SPs and distributors to enter usage/sales data and for distributors and vendors to review and extract data as needed. This type of real-time platform can span consumption and subscription products and easily align data regarding what exactly was provisioned, what was used, and what was billed. The results are significant: eliminating labor time, reducing mistakes, preventing delays, matching usage to what was invoiced, and speeding up the time from quote-to-cash.