Overview

Zest AI software helps lenders make better decisions and better loans—increasing revenue, reducing risk, and automating compliance. Zest-built credit models go beyond the statistical and data limitations of traditional credit scores to identify good borrowers who are often overlooked by legacy techniques. Banks, credit unions, and corporations who lend using Zest models have seen, on average, a 15% increase in approvals with no added risk, and 30% reductions in charge-offs by using more of their own data and the advanced math of machine learning. Zest AI was founded in 2009 with the mission of making fair and transparent credit available to everyone and is now the leader in software for more inclusive underwriting.

Supernova Award Category

Next Generation Customer Experience

The Problem

In 2019, we were at a transitional point in our business, aiming to set ourselves up for significant growth. We had made the decision to pivot from homogenous consumer transactions to complex business-to-business sales. This involved a subscription model that required ASC 606 compliance. We also needed technology that could help us standardize and configure our contracts, which can get very complex and varied in how they are structured and negotiated -- something that had been an ongoing problem for our accounting team for two years. This made it hard to create and manage invoices for customers in a timely manner. 

At the time, we were trying to operate the 11 entities in our organization with a combination of QuickBooks and Excel spreadsheets, creating huge headaches and time-consuming processes when it came time to handle consolidations. Anytime we needed to look up a transaction, we had to remember which subsidiary it was in and had no way to look at a combined view of our entities. Even though our engineering team had done some heavy customization of QuickBooks to help make it work for us, it required considerable maintenance and was ultimately unsustainable for the organization.

The Solution

As we prepared for ASC 606 adoption, we welcomed a new CFO to the team who also saw the value in automating financial processes, reporting, customer contracts, and subscription-based revenue recognition. We knew we needed to get away from manual bookkeeping that not only hindered our visibility into performance but also required resources that could be better spent elsewhere. We wanted to put scalable processes, financial controls, and the right software in at the ground level to make us more productive and agile in the future. 

We evaluated several solutions, including Sage Intacct, that would help us mature our business operations and ultimately better serve customers. The ease of integration with systems like our Salesforce CRM was a big factor in our decision to implement Sage Intacct’s financial platform. We especially appreciated that we could save time managing contracts by seamlessly syncing the customer data we have in Salesforce directly into Sage Intacct.

The results

The more modern system facilitated global growth for us—and more flexibility for customers. We can easily support contracts in multiple currencies, allowing us to think outside the box when meeting and negotiating with customers. Improvements to tracking and reporting also elevated our customer service. We can forecast revenue by contract, with each customer’s monthly revenue and key milestones alongside actuals, ensuring that we deliver exactly what our customers need. Sage Intacct helps us better track invoicing schedules and payment status, so customers receive invoices in a more timely manner.

We improved several financial workflows, slashing our monthly close by on-third, easing preparation of GAAP financial statements, and cutting our chart of accounts in half. We have clear visibility into how standalone selling prices and certain ways of bundling contract elements influences revenue timing, allowing for closer collaboration with sales leadership. We’ve better aligned our teams through increased transparency. 

We now have properly coded data feeding directly from our expense management, AP, and payroll tools into Sage Intacct. This lets us reconcile and accrue for transactions and input journal entries in minutes. The automation also makes our data more reliable, creating a domino effect for our business. We can provide accurate numbers to management quickly, which they turn into action.

Metrics

We’ve been able to refocus efforts and resources on analyzing different contract types, leading the sales team to target deal structures that work best for our business. Not only has this led to faster, smoother renewals, but our time spent proposing and negotiating deals has decreased by double-digit percentages. 

By efficiently adopting ASC 606 practices and scaling our accounting, we’ve seen significant time savings, including shortening our monthly close by 33%—all while doubling revenues. Our finance team has been able to reduce its reliance on external consultants for data entry and monthly close review, which slashed our annual accounting contracting costs by 60%. 

Also key to our success has been the transparency we’ve gained across the organization. We have more insight into overall spending, travel and entertainment expenses, cash flow forecasts, and more, which has cut time spent on ad hoc reporting requests from four hours to under one hour. We recently did a capital raise of $15M, and this visibility was critical to support the necessary due diligence. We were able to answer auditors’ questions in real-time, rather than relying on the time-intensive process of manually pulling data from QuickBooks.

The Technology

• Sage Intacct, including integrations with
  • Bill.com, bill payment platform 
  • Expensify, expense management system 
  • Paylocity, payroll services 
  • Brex, corporate card provider 
• Salesforce CRM

Disruptive Factor

Before, we had a very tedious approach to tracking contracts and revenues. Since our contracts are structured and negotiated in highly varied ways across our 11 entities, contract management had been challenging. But now, we can support increasingly complex arrangements like usage-based billing, letting us standardize contracts and stay on top of all of our different schedules to get customer invoices out faster. 

We implemented Sage Intacct right alongside our ASC 606 adoption. This was game-changing for us because it meant that we were able to get invaluable insight into how to properly work under 606 requirements—thanks to some contract module training we attended, which improved our subscription billing. As we configured our contracts using Sage Intacct, we simultaneously learned best practices for multiple element arrangements, proportional allocation of revenue and other important 606 requirements.

Shining Moment

We have increased visibility into our financial health and customer relationships. Sage Intacct automatically allocates overhead and personnel expenses to departments, saving days of report preparation and making it easy to analyze costs per team. As we’ve continued to grow despite COVID-19 economic pressures, we’ve stayed focused on cost control. We speak about margins and spending with authority and use real-time data to help our c-suite make important decisions.