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About Vertice
Founded in 2021, Vertice is on a mission to help businesses reduce their annual software spend by 20-30 percent. Based in London and fueled by a team of over 200 professionals, Vertice is providing a centralized platform for finance leaders to track and control their software + cloud spending efficiently. Backed by Series B funding from prominent investors like 83North and Bessemer Venture Partners, Vertice has quickly emerged as a leading solution for businesses seeking to navigate the complexities of modern IT procurement while maximizing cost savings and security compliance.
Challenges
Navigating the complex pricing model
Vertice's pricing model was intricately tied to their customers' usage of SaaS services and the savings they achieved through Vertice's optimization efforts. As the SaaS spend increased and crossed certain thresholds, the annual fee would adjust accordingly.
Vertice offered a variety of contract lengths, ranging from 1 to 3 years, with incremental pricing for different years. The annual fee was charged each year, but the billing frequency could vary based on the customer's preference. Some opted for annual billing in advance, others chose semi-annual or quarterly billing, and a few even preferred to pay only after realizing the value of Vertices' service.
Adding to the intricacy was the contingent billing model for a few customers. On top of the base annual fee, Vertice would invoice an additional amount each time they saved the customer a specific amount.
Vertice also provided a savings guarantee, promising a certain level of cost reduction for their customers. If this guarantee wasn't met, Vertice would issue a rebate to ensure the customer didn't overpay.
Moreover, Vertice reserved the right to increase fees if a customer's SaaS stack grew significantly beyond the initial contract value. This meant that even if a customer's SaaS spend remained within the same tier, their fees could still increase if their stack grew substantially.
Managing these intricate pricing components required a robust and flexible system. Vertice needed a solution that could navigate this complexity, ensuring accurate billing and providing transparency to their customers, all while allowing for manual changes as they scaled their operations.
Disjoint, manual billing process
Vertice's billing process was fragmented across multiple systems, requiring significant manual effort from the finance team.
Where any changes occurred, the finance team had to manually update Excel spreadsheets with customer details, billing dates, and revenue recognition information.
With customer data dispersed across HubSpot, Excel, and accounting entities on Xero, obtaining a detailed overview of their financial performance became challenging.
Fragmented revenue recognition
Vertice faced difficulties in handling its revenue recognition requirements as well, which involved managing deferred revenue, unbilled revenue, and other scenarios based on contract terms.
The complex revenue recognition rules became particularly challenging for contracts with multiple currencies and tax jurisdictions. Vertice had contracts in various currencies, including Pounds, Euros, and Australian dollars. They also needed to handle tax calculations and reporting for different tax jurisdictions, such as UK VAT and US sales tax.
Their existing accounting software, Xero, had limitations in handling their revenue recognition needs. This forced the finance team to resort to manual calculations and adjustments on Excel, further compounding the inefficiencies in their processes.
To add to the complexity, Vertice had contract data, usage data, and invoices on different systems. The lack of seamless integration between these systems made revenue recognition even more cumbersome.
As Vertice expanded its operations, the need for an automated, compliant billing solution that handles complex pricing structures and recognizes revenue accurately became increasingly pressing. Automating the billing process would not only save time but also reduce the risk of errors, enabling the finance team to focus on higher-value tasks.
The search for a solution
Vertice needed an automated billing solution that could handle its complex pricing model and accurately recognize revenue. Integration with HubSpot CRM and Xero accounting software was crucial. They also wanted a solution that provides self-serve capabilities to their finance team on creating contracts, so they aren't fully reliant on engineers to make contract changes.
While exploring other billing solutions, the Vertice team discovered Zenskar. The platform's flexibility to handle complex usage-based pricing was a key factor in their decision to evaluate it further. Zenskar's dedicated support, customization options, and ability to send alerts based on usage thresholds resonated with Vertice's finance team. Another significant advantage was Zenskar's seamless integration with Vertice's existing tech stack, particularly HubSpot CRM and Xero.
As Vertice continued their assessment, they were impressed by the platform's finance-friendly UI and the level of control it provided to the team. The ability to create and modify contracts without engineering dependency was a significant draw.
The combination of flexibility, customization, integration capabilities, and user-friendliness made Zenskar a promising solution for Vertice's needs.
Implementation
The Zenskar team worked closely with Vertice to integrate their existing tools.
Zenskar integrated with Vertice's HubSpot CRM, making it the single source of truth for all contracts. This integration allowed Vertice's sales team to easily define and manage contract terms, such as pricing tiers, contingent billing, and uplifts, directly within HubSpot.
On the accounting side, Zenskar connected with Vertice's Xero accounting system to seamlessly push journal entries to the general ledger. This automated data flow eliminated the need for manual data entry, reducing the risk of errors and saving valuable time for the finance team.
One of the key advantages of Zenskar was its ability to support Vertice's multi-entity structure. Unlike other platforms, which required separate accounts for each entity, Zenskar supported both US and UK entities within a single account.
This streamlined entity management and enabled Vertice to manage billing for pricing intricacies across their global operations.
How Zenskar automated billing and revenue recognition for Vertice
Automated contract creation and invoicing
Zenskar's advanced data model enabled the configuration of custom contracts to handle Vertice's complex pricing models.
The seamless integration with HubSpot streamlined deal management for Vertice's sales team. When a deal was closed in HubSpot, it automatically synced to Zenskar, creating a corresponding contract. When the sales team added an uplift in HubSpot to the original deal, it was added as a line item to the existing contract in Zenskar, ensuring a unified view of the customer's billing.
Zenskar intelligently aligned billing start dates for uplifts with the main contract's billing frequency and cycle, ensuring consistent billing cadences. When an uplift was activated mid-billing cycle, Zenskar automatically calculated the prorated amount owed for the remainder of that period and generated a one-time invoice line item.
Instead of sending multiple invoices to a customer each month for various charges (e.g., base fee, uplift, proration), Zenskar consolidated all charges into a single invoice, improving the customer experience and reducing confusion.
Additionally, Zenskar implemented automated payment reminders, sending timely notifications to customers before and after invoice due dates, significantly improving Vertice's collections process.
Zenskar also integrated with Avalara to automate tax calculations based on customer location. Whenever an invoice was generated on Zenskar, Avalara calculated the appropriate tax components and added them to the invoice. This ensured compliance with US, UK, and EU tax requirements without manual intervention, streamlining Vertice's multi-geography operation.
Streamlined revenue recognition
Before Zenskar, Vertice's revenue recognition process was entirely manual, relying on Excel spreadsheets.
Vertice needed to ensure ASC 606 compliance in their revenue recognition process. Zenskar made this possible by configuring the revenue recognition rule using the straight-line method, recognizing revenue evenly over the service period.
When a new contract was created, Zenskar automatically created a series of future-dated journal entries to recognize revenue each month over the contract term.
If a contract was amended mid-term, Zenskar automatically adjusted the deferred revenue balance and reallocated it over the remaining service period. Zenskar also updated all remaining future-dated journal entries to reflect the change in expected revenue. This eliminated the need for manual calculations and adjustments.
While the revenue recognition process was largely automated, Vertice's finance team still had the flexibility to review the scheduled journal entries and make manual adjustments if needed. This provided an additional layer of control and oversight.
Impact
Cut down month-end closing time by 70%
Before Zenskar, Vertice's finance team had to manually do revenue recognition calculations in spreadsheets.
This process was time-consuming and could take 10 -12 days to complete each month, depending on the team's bandwidth.
After implementing Zenskar, the process was streamlined significantly. Zenskar automated invoice generation and revenue recognition calculations. It also integrated with Xero to automatically sync the journal entries, eliminating the need for manual data entry.
This automation not only accelerated month-end close by 2-3 days, cutting down the total time by around 70%, but it also reduced the risk of errors, ensuring accurate financial reporting.
Saved 100 hours/month on manual billing
Prior to implementing Zenskar, Vertice's finance team spent a significant amount of time on manual billing.
This included calculating prorations, applying uplifts, generating invoices, managing tax for multiple jurisdictions, and performing revenue recognition calculations.
Zenskar automated the entire billing workflow. The platform directly fetched proration and uplift information from HubSpot, created invoices automatically, calculated revenue recognition, and synced the data to accounting systems.
The finance team just had to review and approve the invoices, and Zenskar automatically sent them to customers and handled the creation and posting of journal entries on Xero.
By automating these tasks, Zenskar saved Vertice's finance team approximately 100 hours per month. They can now utilize this time for more strategic initiatives rather than being consumed by repetitive manual billing tasks.
Improved Billing Accuracy and Customer Experience
Before Zenskar, Vertice's manual invoicing processes were prone to human errors, particularly when generating invoices. These errors could lead to incorrect customer charges, revenue recognition issues, and potential disputes.
With Zenskar, the billing workflow became automated, reducing the risk of errors significantly. The platform fetched the necessary data from HubSpot, generated invoices accurately, calculated revenue recognition correctly, and synced the data with Xero.
This improved billing accuracy ensured that Vertice's customers were charged correctly and revenue was recognized appropriately, minimizing the chances of disputes or compliance issues.
Moreover, the ability to generate a single consolidated invoice for each customer instead of multiple separate invoices enhanced the overall customer experience. Customers received clear and concise invoices, reducing confusion and improving transparency.
