Cloud phone systems company Vadacom is using Enprise and MYOB Advanced to manage deferred revenue, reduce stock leakage and assess the profitability of projects.
Vadacom is a leading provider of Voice over IP (VoIP) telephony solutions for business. It supplies office IP PBX systems and call centre solutions to hundreds of New Zealand and Australian businesses, including companies such as Repco, Vista Entertainment Solutions, Honda, Secure Parking and Shriro Corporation.
In 2014 a Vadacom system was chosen by state-owned Kordia as the cloud PBX solution they will be offering to their customers. This prompted significant growth and the need for Vadacom to review its systems. Vadacom chose MYOB Advanced partly on its ability to manage deferred revenue. Revenue recognition is important to the company because it bills many contracts annually in advance, says Vadacom Financial Controller Lena Ostrovsky.
“We wanted to be able to spread contract revenue evenly over the term of the contract. If we send a bill to a customer, for example, of $36,000 for a three-year contract, we want to state revenue of $1000 per month each month over three years,” she says.
“The ability to defer revenue was an important criterion for us and MYOB Advanced does this.”
Vadacom has a large volume of recurring invoices. These are issued monthly for items such as service or licence fees. Vadacom uses the Scheduled Billing features in MYOB Advanced to create and email these invoices to customers at the beginning of each month, quickly and easily.
Vadacom wanted a cloud-based ERP solution.
“We wanted the software off the single PC in the office, and we wanted to be able to access it from any computer in the office or remotely,” Lena Ostrovsky says.
The company had other specific reporting requirements. A General Ledger sub account segment structure enables Vadacom to generate a Profit and Loss for each operating division, sales channel and sales person. Reporting on each individual project was also essential.
“Assessing the profitability of each project is an important business metric for us,” says Lena Ostrovsky.
“The project module inside MYOB Advanced gives us this ability.”
Accounting for work in progress is essential for Vadacom. It has employees who install projects and others who service them. Unfinished project work is treated as Work In Progress and does not appear in the Profit & Loss. When a project is complete, costs are allocated to the appropriate cost centre.
“Our new system is complex in a good way,” Lena Ostrovsky says.
“We get a lot of information out in the form of reports.”
Vadacom has used its implementation of MYOB Advanced to tighten up business processes. For example, it now uses serial number tracking for improved stock control.
“We were losing large amounts of stock by the end of each year. Our new stock control system helps reduce this,” says Lena Ostrovsky.
“We use MYOB Advanced to scan stock in and out of our warehouse. The functionality was already inside the software and it was a pretty simple process to connect a scanner to the computer. Staff can no longer just grab stock and forget to record that they’ve taken it.”
Lena believes Vadacom was the first MYOB Advanced site in the country. It has now been live for 18 months.
“Enprise have been great – I recommend them. Whenever we needed help they were always there.”
Enprise did onsite training for Vadacom. The company had been using a very basic accounting programme, so MYOB Advanced was ‘a big leap,’ Lena says.
“The one-on-one onsite training Enprise did for us was very good. I’m very happy with the training Enprise provided, they went through everything step by step.”
Vadacom is one of the earliest adopters of cloud ERP product MYOB Advanced. It has made a highly successful transition from MYOB Account Right. Vadacom wanted the ability to access its ERP system from any computer. Enprise recommended cloud-based MYOB Advanced in part because of its ability to account for and report on all of Vadacom’s key performance metrics. Enprise managed the entire project including scoping, implementation, configuration and training. Vadacom’s Financial Controller describes the new system as ‘complex in a good way’. The company has a new-found ability to pull out information in the form of reports. It can now analyse profitability by division, sales channel, sales person and project. It can account for deferred revenue, manage and report on work in progress outside the P & L, and much more. It has also used Advanced to tighten up business processes such as stock control.
- Manage deferred revenue
- Improved stock control
- Recurring scheduled billing
- Project profit reporting
- Departmental Profit & Loss statements
- Work In Progress is managed outside Profit & Loss
- Access from any computer or device.
Vadacom has used MYOB Advanced to substantially reduce stock leakage and gain new abilities to report on key business metrics. The company can now account for deferred revenue, which is a critical as Vadacom often bills customers annually, in advance. It can analyse the profitability of every project, sales person and sales channel. It can keep unfinished projects off the Profit & Loss by coding them as Work In Progress. It can report on departmental Profit and Loss centres. It can do all of these things from any device with an internet connection.
Download the Vadacom case study (PDF 132 KB)