With the SOFTRAX Revenue Management System (RMS), the components of milestone billing — scheduling, inputs, and budgets — are seamlessly deployed and managed to keep you on schedule.
Milestone billing is used as a billing process that renders payment when certain aspects, or milestones, of the project are completed. Milestone billing is tied closely to project management and covers upfront as well as milestone costs. Service providers and others use milestone billing to keep an eye on profitability and to avoid scope creep, which is uncontrolled growth of a project that results in higher charges. The payment terms for milestone billing vary according to company and industry, but they are tied to measurable aspects of the project. The process typically includes notifications for milestone attainment, invoicing from accounts receivable, and templated invoices with payment terms. Whatever a company’s milestone billing setup or project goals, SOFTRAX RMS can help.
Meet Alex. She manages complex project-based contracts for a professional services firm. Each project has multiple phases and clients are billed when specific milestones are completed. But managing those complex billing schedules manually and complying with ASC 606 and IFRS 15 compliance revenue recognition rules is time-consuming, error-prone, and hard to scale.
That’s where SOFTRAX Revenue Management System (or RMS for short) comes in.
It’s a cloud-based solution that automates milestone billing and links it directly to revenue recognition so Alex can focus on delivering great work and not chasing invoices. With SOFTRAX, you can automate billing based on contractual milestones, whether it’s delivery of a service, completion of a phase, or any agreed-upon event.
Let’s say Alex’s team is building a custom software solution. The contract includes five billing milestones, 50% at project start and 12.5% at four other milestones. Our platform lets you easily create tailored invoice schedules. You can link multiple orders to a single milestone and adjust billing dates and amounts on the fly.
You can generate invoices individually or in bulk and recalculate schedules as the project evolves. SOFTRAX RMS automates the entire billing workflow. Milestones can trigger invoices automatically, whether based on dates or deliverables. It even handles partial shipments, customer holds, and backorders.
Initially, RMS forecasts the value of the milestone schedule as unbilled contract value and unbilled deferred revenue. As each milestone billing event occurs, money automatically moves from unbilled accounts into accounts receivable and deferred revenue. Revenue will automatically be recognized based on your revenue recognition method and schedule.
Because milestone billing is tied directly to revenue recognition in SOFTRAX RMS, Alex doesn’t need to manage two separate systems. Revenue is recognized in compliance with accounting standards automatically and accurately.
The result? With SOFTRAX RMS, Alex has full control over milestone billing and revenue management all in one place. No more missed invoices. No more manual tracking. Just smooth, scalable billing that keeps projects and profits on track.
Ready to explore how you can use SOFTRAX RMS for your billing and revenue recognition? Contact us at sales@softrax.com to schedule a 30-minute consultation.
SOFTRAX RMS automates the critical parts of milestone billing, allowing companies to easily create tailor-made billing and payment schedules for even the most complex scenarios.
SOFTRAX RMS allows you to schedule, generate, and deliver invoices based on dates or deliverables, offering a detailed look at your contract. Milestone invoices can automatically be triggered by API from an external system such as a PSA. SOFTRAX RMS can provide a UI if milestone schedules need to be managed by the accountant.
With SOFTRAX RMS, you can automate key aspects of milestone billing, such as handling full and partial backorders and customer holds. SOFTRAX RMS can automatically create the initial milestone schedule by policy, or the schedule can be passed in.
SOFTRAX RMS lets you leverage milestone widgets to manage even the most complex milestone schedules seamlessly.
SOFTRAX RMS is a cloud-based SaaS solution that enables the best of milestone billing. The capabilities of RMS for milestone billing provide:
Allow revenue allocation and compliance that goes beyond simple scheduling.
Schedule, generate, and deliver invoices based on dates, contractual commitments, business requirements, or on a pre-programmed schedule.
Handle reporting and revenue recognition requirements for ASC 606 / IFRS 15.
Stay on budget for even the most complex project.
Make frequent tasks, such as renewals, easily processed and handled.
Use the analytics capabilities to get a true look at business data.
Milestone billing is an invoicing model in which payments are made in installments based on the completion of specific stages or milestones in a project. The payment cycle uses agreed upon deliverables, or project milestones, as billing deadlines. The billing model is popular in professional services management and in companies with project-driven revenue.
For example, in a construction project, milestones could include the completion of the foundation, framing, plumbing, electrical work, etc. The construction company would bill the customer after each portion is completed.
Milestone billing offers many benefits, including being able to manage cash flow and mitigating risks. Companies also use milestone billing to establish budgets and ensure that all parties stay within the set budget. This billing model also establishes a concrete relationship between payment and project progress.
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"The SOFTRAX suite of products is uniquely positioned to offer the flexibility to handle the various forms of complex billing and revenue recognition we require.”
John Mathison VP of Operations