Consolidating Revenue Reporting Post-acquisition: What to Consider

Do you want good, structured, easy-to-report-on data for revenue reporting? It’s not a trick question—of course you do. And after a merger or acquisition, revenue reporting becomes simultaneously more important and more complex.

It’s challenging to combine and unite two organizations. You need to manage change at every level across multiple dimensions: people, systems, data, process, and governance. There’s pressure to show a return on investment from the transaction. But without accurate reporting, you can’t demonstrate your progress to your PE company or your board.

CPQ is the Solution to Revenue Reporting Challenges

At OpFocus, we know that having accurate reporting is critical to making better decisions. You need a solution that forces consistency and ensures you capture the right data. After helping dozens of high-growth SaaS companies, we’ve determined that one of the most crucial requirements to guarantee high-quality revenue reporting is to implement a configure-price-quote platform such as Salesforce CPQ.

Keep in mind, however, that a platform is only as good as the infrastructure that supports it. CPQ is a highly customizable solution, even out of the box. The way you set up CPQ can significantly impact the data generated for revenue reporting and its subsequent value to your organization.

Setting Parameters for Revenue Reporting

As you establish guidelines for your revenue reporting, or re-establish them post-acquisition, think about and assess the following:

Revenue type

Develop clear definitions for each type of revenue “bucket” in your organization. Start by defining the four major revenue categories:

  • new business
  • renewals
  • expansions/upsells
  • cross-sells

In a merger or acquisition scenario, be sure to get buy-in from both sides—and don’t assume that their definition of a cross-sell or renewal matches yours. 

Contract timing

To get clean, consolidated revenue reporting, you also need to decide how to allocate ARR based on contract terms and timing. How will you handle these scenarios?

  • multi-year contracts
  • ramping contracts (e.g., a three-year contract that steps up each year)
  • pre-sold contracts that begin in a future period (e.g., a subscription that begins 6 months from now)
  • free or trial periods (does the first year include the trial or begin after it?)

Developing clear bookings policies will prevent you from undercounting or overcounting ARR as well as ensuring your revenue is classed correctly for reporting purposes.

Customers

The question “How many customers do we have?” isn’t as simple as it sounds. First, you need to determine how you count customers. Is each new transaction line a separate customer? Maybe you prefer to count logos instead. 

Once you determine what qualifies as a customer, make sure that definition is reflected in how you set up and use Salesforce CPQ.

Design a Revenue Reporting System that works for you

Design a Solution that Works for You

This piece has intentionally presented considerations rather than prescriptions to help improve the quality of your revenue reporting. There’s not one “right” answer when it comes to distinguishing upsells vs. cross-sells or handling ramping contracts. Your organization’s unique needs will determine which options work best for you.

What is extremely important, however, is that you maintain consistency with your selections. Meaningful reporting can only be produced with accurate data. And in a post-merger integration period, the pressure is on—not only to grow but also to demonstrate that growth to your stakeholders. If you’d like to learn more about presenting revenue reporting data, check out our recent article, How to Prepare for Your Next Board Meeting
Are you planning an acquisition and know you’ll need some support? Contact the OpFocus team today to see how we can help.

Jim Parker

about the author

Jim Parker

I’m part of our OpFocus SaaS Growth Advisory bench. This is a team of on-demand, best-in-class independent consultants with previous experience as a VP or senior director role in marketing, sales, revenue operations, client success, or customer support for a SaaS company or have 10+ years as a senior consultant to business executives.

In my client-facing role, I work directly with OpFocus’ SaaS portfolio clients to provide prescriptive best practice guidance and recommendations specifically around optimizing: sales process, revenue operations, and Salesforce as a growth enablement tool. I lead and participate in delivering growth services projects, including business process consulting and strategic roadmap engagements by leveraging his deep experience within this specific domain.