implementing oracle cloud revenue management at valet

Session ID:

Prepared by:

Remember to complete your evaluation for this session within the app!

10916

Implementing Oracle Cloud Revenue Management at Valet Living

the Good, the Bad, the Ugly

April 9, 2019

David Boyer, Director of Financial Reporting

Valet Living

&

Mike Coburn, Director - Business Applications

Grant Thornton

Agenda

• About Grant Thornton

• About Valet Living

• Oracle Cloud ERP Implementation at Valet Living

– Implementation Scope

– Revenue Management Background and Requirement

• Oracle Cloud Revenue Management Solution

• Oracle Cloud Revenue Management – The Good

– Revenue Management Capabilities

– SalesForce to Oracle Integration

• Oracle Cloud Revenue Management – The Bad

– Oracle non-Standard Configuration

• Oracle Cloud Revenue Management – The Ugly

– Oracle Challenges

• Oracle Cloud Revenue Management – Review

Implementing Oracle Cloud Revenue Management at

Valet Living – the good, the bad, the ugly

During this presentation, we will:

• Discuss the implementation of Revenue Management at Valet Living and the integration

between Saleforce to Oracle Cloud ERP to ensure proper revenue recognition.

• Highlight the overall solution for Valet Living.

• Discuss the benefits and challenges related to the delivered functionality of Revenue

Management within Oracle Cloud.

About Grant Thornton

About Grant Thornton

5

Office locations

Reach

Our services

59 offices spread across 30 states and Washington D.C.

Serve 36% of companies on the

2017 Fortune 500 list and 25% of

companies on the Russell 2000 list

• Assurance • Tax • Advisory

PeopleMore than 8,500 professionals in the U.S.

Partners594 partners serving more than 8,000 clients in the nation

RevenueGT U.S. net revenue equals $1.74 billion

stats are as of 07/31/2017

Our Oracle Practice

6

Find your silver lining

gt.com/silverlining

About Valet Living

• As a Tampa Bay Times Top Workplace, Valet Living has been setting the standard for doorstep collection and recycling since 1995.

• Servicing over a million apartment homes across 39 states, Valet Living has grown to become not just the only national provider of doorstep collection and recycling services, but also the only nationally-recognized full service amenities provider to the multifamily industry.

• In addition to doorstep collection, Valet Living’s turns, maintenance and pet station solutions make life easier for both property managers and residents, while improving property values.

• With the launch of its resident-facing amenity services app, Valet Living Home, Valet Living is now the only company in the multifamily industry to combine doorstep collection with both sustainability-related and premium home-related services.

• Baltimore, MD• Atlanta, GA• Miami, FL• Chicago, IL

• Tampa, FL• Denver, CO• Phoenix, AZ• Seattle, WA

Currently Servicing

Future Expansion

Major MSAs include:

• Los Angeles, CA• Dallas/Fort Worth, TX• Houston, TX• Washington, DC

Setting the Standard for Residential Living

Oracle Cloud ERP

Implementation at

Valet

Implementation Scope

• Valet Living implemented Oracle Cloud financials over 5 months, with the following scope:– General Ledger

• Single Business Unit, Single Ledger, USD only

• Multiple Legal Entities

• 7 total accounting segments

– Accounts Payable• Invoice imaging

• 6 total bank accounts

– Asset Management• Corporate and Federal Tax books

– Accounts Receivable• Integration with SalesForce for customers and invoices

• Over 2000 interfaced invoices per month

– Revenue Management• Integration with SalesForce for revenue contracts

– Cash Management (Bank Reconciliation only)

– Purchasing

– Inventory

Revenue Management – Background and Requirement

• A Valet Living service contract specifies the billing details and length of service for a client

• Contracts and corresponding billing events originate in Salesforce but must be accounted for in the Oracle Cloud General Ledger

• Full contract asset/liability (total value of the contract) is booked at the beginning of the contract

• Each month:

– Revenue must be recognized based on delivered services

– Invoices must be sent to customers and Receivables tracked

* Note: Monthly billing amounts and schedules do not always coincide with Revenue Recognition.

Oracle Cloud

Revenue

Management

Solution

Revenue Management – Process Flow

Data from Salesforce to Oracle Cloud is imported into Billing and Revenue Management

G E N E R A L L E D G E RFBDI

Every Day/Adhoc

by User

Contract and Billing Activity

Load Interface

File for Import

(Import

Revenue

Basis Data)

Create

Accounting

Validate

Customer

Contract

Source Data

REVENUE MANAGEMENT

ACCOUNTS RECEIVABLE /

BILLINGFBDI

Every Day/Adhoc

by User

Identify

Customer

Contracts

Load Interface

File for Import

(Import

AutoInvoice)

Import

AutoInvoice

Revenue Management – Sample Contract

7/30/2018 $144,647.36 $144,647.36

7/30/2018 $4,520.23 $4,520.23

8/31/2018 $5,060.64 $5,060.64 $4,520.23 $4,520.23

9/30/2018 $5,060.64 $5,060.64 $4,520.23 $4,520.23

10/31/2018 $5,060.64 $5,060.64 $4,520.23 $4,520.23

11/30/2018 $5,060.64 $5,060.64 $4,520.23 $4,520.23

12/31/2018 $5,060.64 $5,060.64 $4,520.23 $4,520.23

1/31/2019 $5,060.64 $5,060.64 $4,520.23 $4,520.23

2/28/2019 $5,060.64 $5,060.64 $4,520.23 $4,520.23

3/31/2019 $5,060.64 $5,060.64 $4,520.23 $4,520.23

4/30/2019 $5,060.64 $5,060.64 $4,520.23 $4,520.23

5/31/2019 $4,504.62 $4,504.62 $4,520.23 $4,520.23

1/31/2021 $4,504.62 $4,504.62 $4,520.23 $4,520.23

2/28/2021 $4,504.58 $4,504.58 $4,520.23 $4,520.23

$144,647.36 $144,647.36 $144,647.36 $144,647.36

Accounts Receivable Contract Asset Contract Liability Revenue

Accounts Receivable / Billing Revenue Management

In this example:

1. Initial contract established in Rev Mgmnt

3. Billing/Invoice posted 2. Monthly Revenue Recognized


Every Day /Adhoc

by User

Contract and Billing Activ ity

Load Interface

File for Import

Import

Revenue

Basis Data )

Create

Accounting

Validate

Customer

Contract

Source Data

REVENUE MANAGEMENT


BILLING

FBDI

Every Day /Adhoc

by User

Identify

Customer

Contracts

Load Interface

File for Import

(Import

AutoInvoice )

Import

AutoInvoice

• The total contract value = $144,647.36 over 32 months.• Revenue recognized at $4,520.23 per month

• Billing starts the 2nd month at a rate of $5,060.64 through 10 months, then bills at a rate of $4,504.62

Revenue Management – Revenue Contract


Every Day /Adhoc

by User


Load Interface

File for Import

Import

Revenue

Basis Data )

Create

Accounting

Validate

Customer

Contract

Source Data

REVENUE MANAGEMENT


BILLING

FBDI

Every Day /Adhoc

by User

Identify

Customer

Contracts

Load Interface

File for Import

(Import

AutoInvoice )

Import

AutoInvoice

Debit Credit

1 7/31/18 Initial Performance 10-1000-170425-000000-00-00-00000 Contract Asset 144,647.36 18-Jul

Conversion Revenue Management A

22507000001 22759 N

2 7/31/18 Initial Performance 10-1000-170525-000000-00-00-00000 Contract Liability 144,647.36 18-Jul


22507000001 22759 N

3 7/31/18 Performance Obligation Satisfied 10-1000-170525-123456-00-00-00000 Contract Liability 4,520.23 18-Jul


22507000001 22759 N

4 7/31/18 Performance Obligation Satisfied 10-2627-470015-123456-00-00-00000 Contract Revenue 4,520.23 18-Jul


22507000001 22759 N

5 8/31/18 Performance Obligation Satisfied 10-1000-170525-123456-00-00-00000 Contract Liability 4,520.23 18-Aug

Valet Living US_032742 Revenue Management

A 36242000001 36243 N

6 8/31/18 Performance Obligation Satisfied 10-2627-470015-123456-00-00-00000 Contract Revenue 4,520.23 18-Aug


A 36242000001 36243 N

7 9/30/18 Performance Obligation Satisfied 10-1000-170525-123456-00-00-00000 Contract Liability 4,520.23 18-Sep


A 50463000001 50464 N

8 9/30/18 Performance Obligation Satisfied 10-2627-470015-123456-00-00-00000 Contract Revenue 4,520.23 18-Sep


A 50463000001 50464 N

9 10/31/18 Performance Obligation Satisfied 10-1000-170525-123456-00-00-00000 Contract Liability 4,520.23 18-Oct


A 66191000001 66192 N

10 10/31/18 Performance Obligation Satisfied 10-2627-470015-123456-00-00-00000 Contract Revenue 4,520.23 18-Oct


A 66191000001 66192 N

Line Date Event Account ClassAccounted (USD)

Accounting Period Journal Batch

Revenue Management – Revenue Accounting

1. Initial contract established in Rev Mgmnt

2. Monthly Revenue Recognized


Every Day /Adhoc

by User


Load Interface

File for Import

Import

Revenue

Basis Data )

Create

Accounting

Validate

Customer

Contract

Source Data

REVENUE MANAGEMENT


BILLING

FBDI

Every Day /Adhoc

by User

Identify

Customer

Contracts

Load Interface

File for Import

(Import

AutoInvoice )

Import

AutoInvoice

Accounts Receivable – Billing Activity


Every Day /Adhoc

by User


Load Interface

File for Import

Import

Revenue

Basis Data )

Create

Accounting

Validate

Customer

Contract

Source Data

REVENUE MANAGEMENT


BILLING

FBDI

Every Day /Adhoc

by User

Identify

Customer

Contracts

Load Interface

File for Import

(Import

AutoInvoice )

Import

AutoInvoice

Accounts Receivable – Billing Activity

3. Billing/Invoice posted


Every Day /Adhoc

by User


Load Interface

File for Import

Import

Revenue

Basis Data )

Create

Accounting

Validate

Customer

Contract

Source Data

REVENUE MANAGEMENT


BILLING

FBDI

Every Day /Adhoc

by User

Identify

Customer

Contracts

Load Interface

File for Import

(Import

AutoInvoice )

Import

AutoInvoice

Line Account Currency Accounting Date Accounted Debit Accounted Credit Account Description

57 10-1000-110005-123456-00-00-00000 USD 8/31/2018 5,060.64 A/R - Clients-The Residences

990 10-1000-170425-123456-00-00-00000 USD 8/31/2018 5,060.64 Unbilled Revenue-The Residences











Oracle Cloud

Revenue

Management – The

Good

Oracle Cloud Revenue Management: The Good

Revenue Management within Oracle Cloud provides the following functionality:

– Enables compliance With ASC 606/IFRS 15

– Provides for the automation of the creation of Customer Contracts, Performance Obligations, and Accounting Entries*

• Customer Contracts may be created for services and/or physical goods

• Performance Obligations must be created for each service requirement/good transferred

• The Revenue Management Subledger generates the appropriate accounting entries for revenue for each period

– Allow for Revenue Recognition over time or at a point in time based on Satisfaction Events or Revenue Satisfaction Plans

• Revenue may be recognized incrementally as each portion of the Performance Satisfaction Event is satisfied, or when the Event is fully satisfied

– Provides Repository for Imported Contract, Billing, and Satisfaction-Related Information

• Create visibility into the progress of a contract (revenue recognized/amount billed out of total contract value, and tracking of performance obligations)* Note: Valet is not importing billing activity into Rev Mgmnt

• The application tracks the initial contract information along with any revisions that have been made during the life of a contract

– Revenue Management Reporting

• Revenue Contract Account Activity Report: Reports account balances by contract and performance obligation

Oracle Cloud Revenue Management: The Good

Revenue Management within Oracle Cloud allowed Valet to:

– Track revenue contracts from Salesforce for over 4000 clients within Oracle

– Inventory Item codes were used to drive accounting

– Correctly account for long term contracts by:

• Tracking all contract information in Revenue Management, which then creates a Contract Liability and Contract

Asset

• Track receivables separate from revenue, receivable debit and contract asset is credited.

• Revenue Management recognizes revenue evenly each month, which debits the contract liability, based on

performance satisfaction plans

– Track any contract revisions communicated by Salesforce

Note: This can all be done through automated integrations and scheduled processing

Oracle Cloud

Revenue

Management – The

Bad

Oracle Cloud Revenue Management: The Bad

The following items required “non-standard” configuration within Oracle Cloud:

– A separate integration or file upload was needed for both the contract and billing

components.

• Billing information into Revenue Management was not performed, since it primarily served as

“informational” and would have required an additional integration

– Billing and Revenue are not directly tied

• Billing cannot be done inside of Revenue Management and there is no direct tie to Accounts

Receivable

• With no connection between Accounts Receivable and Revenue Management, Subledger

Accounting was needed to ensure the correct accounting took place. (e.g. credit the correct

contract asset in billing vs. revenue)

• We could have uploaded a billing to the contract, but this would have been another integration, and

the AR integration would have still been required in order to bill the customers

Oracle Cloud Revenue Management: The Bad

• Delivered Performance Satisfaction Plan Rates only go to three decimal points, creating unexpected revenue

numbers due to rounding issues

– Valet had to define and load custom Performance Satisfaction Plans for each possible contract length (1-120 months), to

increase the decimal places

Delivered Performance Plan Rates Sample Valet Performance Plan Rates

Oracle Cloud

Revenue

Management – The

Ugly

Oracle Cloud Revenue Management: The Ugly

The following items created challenges during the implementation:

• No direct Revenue Management to Accounts Receivable integration

– In order to Invoice and track Receivables, billing events must be created separately

• Contract Asset and Contract Liability Accounts assigned at the Ledger Level

– Only one Contract Asset and one Contract Liability account string can be defined during configuration

• No Manual Creation of Contract or Contract Revision

– All contract information must be uploaded

– There is no way to edit or create any contracts within Revenue Management

– Contract upload errors permanently reside on the interface table

Note: An enhancement request has been submitted for each of the above

Note: This shows that Oracle is actively working to improve Revenue Management

• During the implementation, only imported customers could be used within Revenue Management (R13/17D)

– Customers had to be created via integration (FBDI)

– This was resolved in R13 Release 18A

Oracle Cloud Revenue Management: Review

While some challenges exists, the overall implementation of Revenue Management

at Valet Living:

• Provides an integrated solution from SalesForce to Oracle Cloud ERP

• Reduced the number of manual calculations and journal entries needed at month-end

– Over 4000 contracts processed monthly

• Provides a mechanism to store and track Valet Living service contracts within Oracle Cloud

– Provides ability to report within Oracle Cloud, as needed

• Allowed for separate billing and revenue recognition activity– Revenue evenly recognized

– Billing as needed/appropriate

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Session ID:

Remember to complete your evaluation for this session within the app!

10916

[email protected]

[email protected]

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Appendix

Appendix: Step by Step in Oracle

• Revenue Management Process

– Load Interface File for Import/Import Revenue Basis Data

• Loads Salesforce contract data into the application

– Validate Customer Contract Source Data

• Ensures correctness of uploaded data

• Errors sent to import errors spreadsheet

– Identify Customer Contracts

• Creates a visible contract within Revenue Management

• Creates Contract Asset and Contract Liability

• Recognizes first period of revenue

implementing oracle cloud revenue management at valet

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