Yembo collected 50% of the revenue a month earlier with Zenskar

About Yembo

Yembo is an AI-powered platform that provides virtual surveys and inspections for home service companies. Founded in 2016 and headquartered in San Diego, Yembo helps home service organizations streamline operations and acquire more customers. With a growing client base, Yembo strives to transform traditional processes in the home services industry through innovative artificial intelligence solutions.

Yembo's pricing complexity

Yembo's pricing was based on the usage of their AI-powered virtual surveys – the number of surveys conducted, the type of surveys, and the number of managed services provided. 

They supported both prepaid and postpaid pricing models. Their prepaid component included a fixed usage grant. And once usage exceeded, overages were charged at the end of the billing cycle.

In addition to product usage, Yembo offered managed surveys as a separate service, which had to be billed separately from the product usage. This added another layer of complexity to Yembo’s pricing.

Yembo’s billing nightmare

Yembo's billing process was manual, spread across multiple systems, and required significant effort from their finance team.

The sales team maintained deals and pricing details in spreadsheets. Contracts were created by copying relevant data into PandaDoc, and signed contracts were also tracked in spreadsheets.

While Stripe handled invoicing for a few usage-based contracts with a simple billing cadence, more complex contracts required manual intervention.

Yembo’s unique pricing model required sending separate monthly invoices to each customer - one for prepaid charges and one for overages and managed surveys.

Some customers also had billing cycles separate from calendar months, needing additional work on the invoicing process.

For the finance team, it meant tracking usage data in spreadsheets and creating and reconciling invoices for their customers manually.

Revenue recognition misalignments

Revenue recognition also presented a few challenges for Yembo.

With usage data in the Yembo app and contracts and invoice data in separate spreadsheets, Yembo's finance team had to track them closely to recognize revenue for customers.

Their revenue recognition was also closely tied to the invoices generated for customers. This meant that the timing of invoice generation directly impacted when revenue could be recognized. 

Since invoices followed the contractual start date rather than a uniform calendar schedule, it sometimes caused delays in recognizing revenue.

Specifically, the revenue from fixed monthly subscriptions was recognized evenly over each month, while overages were recognized based on the previous month's usage.

This presented two challenges to Yembo’s finance team: 

1. Aligning the revenue recognition for prepaid subscriptions and postpaid overages.
2. Ensuring that revenue expected to be recognized in one month does not leak into the next month.

While Yembo's finance team managed it well, as they grew, they realized that an automated solution would be ideal to support their growth.

The search for a solution

The team set out to find a system that could handle their complex usage-based pricing models and revenue recognition needs.

They explored multiple vendors, but none were a perfect fit.

In short - Chargebee's HubSpot integration was broken, Maxio had limitations with customizing revenue recognition, and Zuora didn't offer integrations with HubSpot and QuickBooks – both critical to Yembo's workflow.

After evaluating dozens of solutions in vain, they stumbled upon Zenskar. 

They signed up for a demo and were soon impressed by Zenskar’s ability to handle complex, usage-based billing and revenue recognition scenarios.

Zenskar’s out-of-the-box integrations with HubSpot and the ability to flow data with Zenskar in real time fit Yembo’s needs perfectly.

Additionally, integrations with QuickBooks and Stripe further solidified Zenskar as the ideal solution for Yembo.

The transparency and simplicity of Zenskar's pricing model also played a significant role in their decision making.

Implementation

The Yembo app was integrated with Zenskar's usage metering layer via API.

The Zenskar team worked closely with Yembo’s sales team to set up their HubSpot sales pipeline, making HubSpot the single source of truth for contracts.

With the integration, Yembo’s sales team could easily define the agreed-upon subscription fee, eligible survey volume, and overage fees directly in HubSpot. 

This streamlined customer management and enabled Yembo to set up pricing intricacies like prepaid credits, postpaid overages, variable billing cadences, and pay-in-installment terms in their contracts.

How Zenskar automated billing for Yembo

Streamlined invoicing & reconciliation

Before Zenskar, Yembo's finance team had to send separate invoices to each customer – for prepaid fees, overages, and managed surveys. 

Zenskar helped them combine all prepaid and postpaid charges as line items on a single invoice per customer. 

This made the separation between prepaid and postpaid charges clear in customer invoices, reducing confusion. Further, customers could now see a breakdown of line items on the Stripe checkout screen, so they knew exactly what they were paying for.

Zenskar also made reconciling partial payments hassle-free for Yembo.

Zenskar automatically tracked all invoices and payments in an integrated ledger. Incoming payments were automatically applied to open invoices from oldest to newest. It also tracked and adjusted remaining invoice balances and customer credits.

So, even with irregular, partial payments, Yembo was able to maintain accurate accounts of money owed and credits.

Automated usage monitoring

Before Zenskar, Yembo tracked usage data in spreadsheets and had no way to monitor usage automatically.

Zenskar automated the process by connecting the Yembo app with Zenskar’s metering layer.

With this, Yembo was able to configure custom entitlement expiration rules without taking up engineering bandwidth. It enabled them to track usage during the contractual period.

Simplified revenue recognition

Previously, Yembo's revenue recognition was closely tied to a straight line amortization of contracts, not actual customer usage.

Yembo needed to recognize revenue monthly based on minimum contractual entitlements. If usage exceeded the monthly minimum, they had to recognize the total overage for that period. This meant revenue shouldn’t be a flat amount due to usage fluctuations, but recognition had to occur as usage grants were fulfilled.

Zenskar solved this by implementing revenue recognition rules based on accrual accounting principles that recognize revenue based on actual usage data.

With this, Zenskar ensured that revenue recognized in a month is truly earned, regardless of when invoices are generated or payments are received. 

Zenskar also enabled real-time revenue recognition for Yembo. It automatically created journal entries based on events like usage, invoices, and payments, eliminating the need for manual tracking.

By shifting to an accrual accounting method based on actual usage data, Zenskar streamlined Yembo's revenue recognition process and provided a more reliable and precise picture of their financial performance.

Impact

Collected 50% of revenue earlier by a month

Zenskar helped Yembo shift from postpaid to prepaid billing for their monthly invoices.

This transition enabled half of their monthly collections to move ahead by a month. It resulted in approximately 50% of their annual revenue being collected a month earlier than before.

Zenskar's robust billing automation made this transition seamless, and ensured a smooth experience for both Yembo and their customers.

Saved 90% time on billing and revenue recognition

Zenskar’s fully automated billing and revenue system eliminated most manual billing, accounting, and AR tasks for Yembo.

What once demanded an hour per customer per month now took minutes, freeing up Yembo’s finance team from repetitive grunt work. 

Before Zenskar, manual billing and revenue recognition occupied most of the finance team’s bandwidth.

Reduced revenue leakage by 100%

By integrating the Yembo app with Zenskar's metering layer, Yembo gained better visibility into usage data.

All consumption data now automatically triggers invoices, payments, credits, or revenue events within Zenskar. By automating this process, any usage overages beyond contractual amounts are billed, eliminating any manual tracking errors that would result in lost revenue.