The Complex Web of Reconciliation for Microsoft Partners and Resellers

As the demand for solutions in all domains like storage, CRM, Workplace Collaboration, etc., is going through the roof, Microsoft Partners, as well as Cloud Solution Providers (CSP) and Managed Services Providers (MSP), have a very lucrative business opportunity to explore. Enabling customers to utilize numerous offerings from Microsoft is one part of the equation. Realizing revenue from their business is the other. It is important for them to carefully manage their numerous offerings and deliver personalized engagements for end customers.

However, while offering products and services to end consumers, there is one area where most MSPs and Microsoft Partners face a huge challenge– reconciliation. Discrepancies may be found in invoices generated for customers and the receipts for payments made to Microsoft for leveraging various offerings from them.

Therefore, reconciliation becomes a key priority that every Microsoft Partner or reseller needs to factor. In simple terms, reconciliation is the accounting process of matching the exit and entry flow of money in the book of records. In other words, ensuring that the balances of two accounts are aligned during a financial accounting period wherein money exiting one is matched to entries in the other.

Reconciliation can become an Achilles Heel for resellers if they are not prepared to handle the diverse range of data that comes into the accounting scenario from customer operations through multiple channels. Let us examine a few instances that prove the severity of the issue:

Reconciliation Process in Work 365

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Inability to Identify Revenue Leakage

Large discrepancies in accounting can cause severe business impacts. Even worse is the situation where revenue leakage cannot be identified owing to manual management of reconciliation. There may be errors in the system or delayed entries which will result in further ambiguity and confusion. The further this ambiguity exists; the more will be uncertainty that piles up in the accounting process.

Overhead of Data Management

There is a lot of data that has to be collated and processed in parallel during the invoicing stage as well as final financial accounting. Multiple models of subscriptions create different templates of invoices for different customers and on top of this, there will be custom offers and bundled service packages that are to be offered to end customers.

All this will lead to a barrage of data points to be handled in the financial accounting and reporting process. Without a streamlined reconciliation process and system in place, management of such a diverse pool of data can create overheads that become very challenging as time progresses.

Accommodating Diverse Billing Options

Cloud offerings like Azure from Microsoft can become overly complex from a billing standpoint. Usage-based billing requires a more efficient payment reconciliation system that can verify usage-based billing receipts from providers like Microsoft, adjust revenue margins and profit parameters for partners and resellers in the receipt, and finally deliver an itemized invoice for the end customer. Reconciliation in such a complex billing scenario can become quite a complex endeavor.

Large Manual Effort Needed

Most resellers and Microsoft Partners follow manual practices for reconciliation. This approach takes considerable time and effort and at the same time, can result in conflicting invoices or billing information due to erroneous data handling.

In short, such events can impact customer sentiment negatively and can ultimately result in loss of business to competitors who can offer superlative experiences through high-end digital systems for handling reconciliation. So, what is the solution to this challenge?

Billing Automation is the way forward

The key solution is to integrate a powerful automatic billing solution that has reconciliation features also in-built as a philosophy. Reconciliation should be considered as the desired output for the financial accounting of your business rather than viewing it as a measure of financial accounting accuracy.

By perceiving reconciliation as a philosophy, resellers and partners need to focus on investing in solutions that help achieve seamless reconciliation during financial audits. Modern solutions like Work 365 ensure reconciliation of financial data by seamlessly automating billing, handling nuances of subscriptions and vendor agreements, configurable and customized offerings tailored for every single customer, and much more.

With a modern billing automation platform having reconciliation capability, it becomes easier to achieve a bi-directional synchronization between cloud providers like Microsoft and the reseller. This allows them the flexibility to sell tailored offerings with deep customization according to the needs of potential customers. At the same time, the solution will handle errors in accounting entries, and unpredictable price changes in subscriptions and eliminate the occurrence of missed entries for events like cancellations.

As mentioned earlier, reconciliation should be viewed as a philosophy or objective that a reseller or partner business seeks to achieve by placing efficient automation systems in place for their subscription billing. By following due diligence in managing and logging all transactions via the system, the foundations for an accurate reconciliation will be easier done than said.

Get in touch with us to explore how Work 365 enables seamless reconciliation experiences for your reselling and MSP business line.