The Predictive Index Saves Time on Revenue Management and Simplifies Reporting With NetSuite

Rosalyn Impink, NetSuite Contributor

December 1, 2022


QUICK READ:

  • Software company The Predictive Index (PI) helps organizations hire and optimize talent. The team switched to NetSuite ERP after finding flaws with Microsoft Great Plains and FinancialForce.
  • Time savings are a core benefit: Processing expense reimbursements after a recent company conference, for example, took an hour instead of a full day.
  • PI completes facets of its monthly close in half the time by handling deferred revenue in NetSuite Advanced Revenue Management instead of Excel.
  • After a year with NetSuite, PI’s revenue management documentation was so accurate that auditors reduced their sample size by half.
  • PI will next save time in forecasting with NetSuite Planning and Budgeting, so the finance team can continue shifting effort from tedious tasks to big-picture goals.


About The Predictive Index

The Predictive Index (PI) is in the business of building dream teams. The Massachusetts-based company is a pioneer in the talent optimization field, helping managers and HR professionals use the science of behavioral and cognitive patterns to make hiring decisions and boost employee retention.

Founded in the 1950s, The Predictive Index(opens in new tab) has spent decades refining its proprietary behavioral assessment and developing new ones. Now a software company, it offers four core modules: Hire, for selecting employees; Inspire, for increasing retention; Diagnose, for improving engagement; and Design, for refining team dynamics.

PI was acquired in 2015 and has since grown from 35 to over 250 employees. About 10,000 customers worldwide have used its products to fine-tune their HR and management practices — mostly midsize organizations like the well-known fitness company Spartan Race, and some larger enterprises like Subway. Selling its technology through a partner network, PI recently shifted to a product-led growth strategy,(opens in new tab) focusing on making its four modules indispensable to managers not only as they hire but also as they manage teams day-to-day. Last year, it posted $95 million in billings and a 27% year-over-year revenue increase.
 

Building Effective Teams With Ineffective Business Systems

PI previously used Microsoft Great Plains, and later FinancialForce, to run the business. Neither system offered the accuracy and flexibility it needed. For example, PI’s balance sheet in FinancialForce sometimes wouldn’t tie, said controller Ashley Driscoll — assets simply wouldn’t equal liabilities and equity, and finding the problem was extremely difficult. And when PI needed to create a trended balance sheet for investors, it found that doing so in FinancialForce would require paying a consultant to do the work.

 “It honestly just didn’t function as a true accounting software,” Driscoll said.


New ERP Brings Wins in Finance and Accounting

On a recommendation from the previous controller, PI implemented NetSuite ERP(opens in new tab) about two years ago. Shortly after the switch, the team made efficiency gains in a number of areas:

Reporting: With FinancialForce, PI suffered from a lack of detailed reporting. Now, the FP&A manager customizes NetSuite Financial Reporting(opens in new tab) to segment data by revenue channel, product, and geography. Revenue channel segmentation is especially important: If PI is behind its revenue target for the year, for example, it can pinpoint precisely which channels are lagging. As PI evolves into a product-led company, it will further customize NetSuite reports, tagging billings to track how individual products — like the Hire module versus the Diagnose module — are selling across its partner network.

Revenue management: Driscoll calls NetSuite Advanced Revenue Management(opens in new tab) “the Holy Grail” in complying with ASC 606 and saving time. With a subscription-based business model, revenue recognition is extremely challenging. PI relies on the system to account for its complex mix of products and delivery schedules in compliance with the latest accounting standards. Prior to NetSuite, Driscoll managed deferred revenue in Excel, creating separate allocation schedules for each line item in every contract. Now, that work is automated in NetSuite, and PI’s accounting manager completes this part of the monthly close in half the time.

Automated revenue management also saves time during annual audits. Previously, auditors would test a sample of about 200 selections, because PI would inevitably miss a couple. After PI’s first year with NetSuite, its documentation was so accurate that auditors were able to reduce that sample size by half — and they didn’t have to do any retesting or pull any additional files.

AR: PI automatically sends overdue notices to its clients and partners using NetSuite Dunning Letters(opens in new tab). The series includes four emails, each with a different message and intensity level. PI has a goal to reduce its days sales outstanding (DSO) by about 16% by the end of the year, and these automated dunning letters will contribute to that.


Planning and Budgeting Gets a Boost

PI is currently implementing NetSuite Planning and Budgeting(opens in new tab) to save time in forecasting. Currently, the team uses a 50-tab spreadsheet to forecast revenue and accounts payable separately, then bridge the two together.

“Every month, we go through and update the spreadsheet with actuals, which is very time-consuming,” Driscoll said. “In NetSuite Planning and Budgeting, the actuals will be updated automatically, which will save us a huge step.”

Next, Driscoll is looking to set up access for department heads, so they can log in and see at-a-glance how they’re trending toward quarterly forecasts, even as those forecasts are frequently updated.


Automation Powers a More Strategic Finance Team

Overall, PI is using NetSuite to “get more disciplined as a company,” Driscoll said. For example, her team recently automated expense reimbursements, which were previously a time-consuming job. After PI’s annual conference this spring, its AP manager processed 130 expense reimbursements in about an hour. On the old system, it would’ve required a full day of work.

Efficiencies like these are top of mind as PI continues to grow its revenue, employee count, and client roster, Driscoll added. She’s relying on NetSuite automation to allow her team to continue acting as a strategic advisor to the rest of the business.

“I don't want my team in the weeds doing transactions every day,” she said. “I want them to be thinking about the bigger picture: How can finance help the company achieve its goals? Automation takes them out of the day-to-day and leaves room for that thought process.”
 

See how your business can automate revenue recognition(opens in new tab), ease compliance and more in this on-demand demo.

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.