Proration can be a complex and daunting topic. But mastering it will give you flexibility in how you price and structure product lines, and drive additional revenue. In this session, we'll share best practices with proration and the impact it has on revenue. You'll also learn the key differences between billing rules and revenue rules and how they affect invoicing and revenue recognition.

1. SUBSCRIBED 2018

2. Finance Zuora Subject Expert
Monique Romero

3. SAFE HARBOR DISCLAIMER
The following presentation is intended for information purposes only. The development, release, and timing of any features or functionality
describedforZuora’sproductsremainsatthesolediscretionofZuoraandissubjecttochange. Anyunreleasedservicesorfeaturesreferencedin
thispresentationarenotcurrentlyavailableandmaynotbedeliveredontimeoratall.Customersshouldmakepurchasedecisionsbasedupon
productfeaturesthatarecurrentlyavailable.
Inaddition,statementsinthispresentationthatrefertoforecasts,futureplansandexpectationsareforward-lookingstatementsthatinvolverisks,
uncertainties,andassumptions,manyofwhichinvolvefactorsorcircumstancesthatarebeyondourcontrol.Ifanysuchuncertaintiesmaterialize,
if any of the assumptions prove incorrect, or if priorities or resourcing changes, actual results could differ materially from such forward-looking
statements.Youarecautionednottoplaceunduerelianceontheseforward-lookingstatementsastheyreflectZuora’sexpectationsasofthedate
ofthispresentation.Inaddition,actualresultscoulddiffermateriallyfromthoseexpressedorimpliedintheforward-lookingstatementsduetoa
number of factors, including but not limited to, risks detailed in our Annual Report on Form 10-K filed with the Securities and Exchange
Commission(SEC)onApril18,2019,aswellasotherdocumentsthatmaybefiledbyus fromtimetotimewiththeSEC.CopiesofAnnualReport
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atwww.sec.gov.Zuoraassumesnoobligationanddoesnotintendtoupdatetheseforwardlookingstatementsafterthedateofthispresentation
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4. v
CFO, WorthPoint
Neal McAtee

5. WHO ARE
WE?
o Identify, Research, Value
Antiques and Collectibles
o DIY Model – Monthly/Annual
Subcriptions to Data Base
o Gross Billings of $350,000
o 15,000+ invoices a month
o Started with Internally Written
Billing
o Migrated toAnother Billing
System Prior to Zuora

6. WHAT IS
PRORATIO
N

7. PRORATION IS THE BILLING
CONCEPT THAT LETS YOU DEAL
WITH
CHANGES TO YOUR SUBSCRIPTION.

8. IN ZUORA, THIS MEANS BEING ABLE
TO BILL FOR SERVICES THAT ARE
ASSOCIATED WITH A PARTIAL
PERIOD
Full Period
$100
Total Sum of Invoiced Amount $175
Partial Period
$75

9. WHY YOU
SHOULD
CARE

10. But when you think about billing…
you can’t forget about revenue recognition.

11. Given advances in technology, auditors are
demanding more precise revenue
recognition policies that are often daily in
nature.

12. HOW
PRORATIO
N WORKS

13. How Prorations happen in Zuora
• Upsell to the subscription
• Downsell to the subscription
• Start subscription mid month
• Subscription cancellations

14. Source:
https://knowledgecenter.zuora.com/BC_Subscription_Management/Subscriptions/G_Pr
oration
PRORATION CAN QUICKLY BECOME
COMPLICATED

15. Proration Example
Service period: 6/15-6/30
Prorated amount: $50
June July August
Service period: 7/1-7/31
Monthly Charge: $100

16. Configurations that affect Proration values
• Rate plan charge trigger conditions
• Subscription Level
• Bill Cycle Dates
• Account Level

17. HOW
PRORATIO
N AFFECTS
REVENUE

18. Billing and Revenue Rules have to align
Billing Rules Revenue
Rules AND
• Results could show revenue as understated revenue
recognition
Invoiced for 30 days
$150 = assumed daily
revenue is $5
$150 Recognize over 31 days =
$4.84 in daily revenue

19. HOW
WORTHPOI
NT
DOES IT
• Transitioning from
manual close to
automated close
• Download csv files
• Create pivot tables
• Copy pivot data to excel file
• Calculate Deferred Revenue
• Create Journal Entries
• With transition, will
recognize on daily basis
• Download JE directly to QB

20. Let Zuora do it!
WORTHPOINT’S SOLUTION TO
IMPLEMENTATION

21. Key Takeaways
• Review Billing Settings based on the business
requirements
• “Assume 30 days in a month” or “use actual number of days”
• Review Revenue Settings for days distributed
• Daily over time = actual number of days in the month
• Address the difference between Billing Rules and Revenue
Rules

22. Q & A

23. THANK YOU!