Financial operations for modern hardware

Saving time and money with improved billing for hardware-as-a-service (HaaS)

The best finance teams at hardware-as-a-service (HaaS) companies track everything from a high-level business overview down to the asset-level details. A controller can drill into particulars of a P&L for each serial (revenue and cost every asset is generating over time) and a CFO can quickly see how those details roll up for the Board (what the business is doing as a whole).

Hardfin triangle: hardware-as-a-service (HaaS) reporting from high-level CFO report to low-level asset P&L

That’s a lot to manage at both the operational and strategic levels. Whether someone in Operations team has shipped a piece of hardware, whether someone in Inventory has recorded the ship date, and whether someone in Accounts Receivable can access that date to send the invoice—and whether every such effort for every piece of hardware is tied together in a source of truth, so the entire company can track its assets, capture cash, run financial reporting, and recognize revenue.

HaaS billing is uniquely complicated

Hardware-as-a-service is more complex than a traditional hardware or software businesses for a number of reasons. For one, HaaS finance teams effectively run three separate businesses: hardware, leasing, and subscriptions. Yet team members likely only have experience in either hardware or SaaS—not both—making hardware financial operations an unfamiliar landscape. So most finance professionals in HaaS start out familiar with only one half of the business (or the other).

Even finance leaders who understand the full scope of the problem have a difficult challenge in tracking all the cross-functional efforts and data dependencies required to keep operations running. Finance often needs to gather hundreds of data points over the life of a single customer contract. This means clearly defining the solution, contract terms, line items, pricing milestones, and recurrence rules. It also means tracking a series of asset activities over time. And it means interlinking those activities with one-time and recurring event triggers.

Simple example. Both the down payment and the cost of warranty may be due at signing; a shipping fee may be charged upon shipment, at which point the hardware tax is calculated; an installation charge may be due upon delivery, at the same time the service plan is billed; recurring software fees start being charged when assets are deployed; and so on.1

So every team at the company is involved in managing a hardware subscription. When the data isn’t available with unified reporting, finance teams are forced to go to great lengths—reach out to the warehouse, call the shipping department, text the installation team driver, and more—in order to verify location and context and know how to handle each contract correctly. This impacts contracting, accounts receivable, FP&A, accounting, and audit.

Maintaining that data on spreadsheets—which is how many companies start tracking their assets—is cumbersome and error-prone. It’s why most finance teams can’t answer all the fundamental questions confidently: “Which assets do we have? Where are they? How are we billing them? And are we billing them correctly?” The unique complications of hardware financial operations pose an enormous business problem. And it’s up to a HaaS finance leader to solve it.

Hardware financial operations is impossible to get right with conventional tools

If you're a finance professional at a company offering hardware subscriptions, you know how difficult it is to get hardware financial operations right. (We haven’t spoken to a single finance leader who isn’t struggling with this!) That’s because successful hardware financial operations requires tightly integrated asset, billing, and accounting data: 

  • Want a 30% down payment on shipping? You need to connect hardware shipping events to the billing engine.
  • Going to charge for software after initial deployment? You need to turn hardware deployment into a product charging trigger.
  • Need to pause billing while hardware isn’t operating? You need to link hardware status changes to the invoicing process.
  • Looking for variable billing based on performance? You need to load hardware utilization data into the pricing system.
  • Have to swap out equipment? You need to link hardware RMAs to subscription management.

These steps can only be done with systems and processes that integrate asset tracking, billing management, and accounting automation. And until now, there’s been no tool for this job. Hardware companies offering as-a-service models have tried to manage the complexity by piecing together a combination of tools—perhaps a CRM, an ERP, billing software for SaaS, and lots of spreadsheets.

A CRM and ERP play necessary roles in hardware businesses. But a piecemeal solution doesn’t solve for hardware financial operations because the software involved isn’t built for it. So homegrown connections to make HaaS “work” tends to create costs, cause inefficiencies, and present more risk—fitting a square peg in a round hole. HaaS finance teams need a system that connects with CRM and ERP systems to integrate asset, billing, and accounting data.

“ERPs are inflexible for manufacturers and it’s impossible to do subscriptions well. We tried for a year! It was such a pain, we went back to Excel. Now we meet monthly to go over spreadsheets and find errors every time.”
Hardfin icon (color)
Chief Financial Officer @ global robotics manufacturer

There are tangible material benefits to doing hardware financial operations right

It's critically important to get hardware financial operations right—especially now that HaaS finance teams have access to an integrated platform. The benefits include:

  1. Make money with improved collections—not only collecting all the cash you're owed (eliminate missed billing and misbilled invoices) but also collecting it faster (reduce average days to send invoice)
  2. Save time with a unified reporting layer—team members don't have to run around to different systems, send Slacks and emails to chase down data, and waste time correcting confusion from having the wrong information in the wrong place
  3. Reduce costs by reducing or reallocating spend on manual processes—and reduce risk by relying on sophisticated automations instead of manual oversight
"I wish we had Hardfin when I got started. We grew our business to a successful acquisition but the systems were painful and the data was a nightmare. Meaningful errors build up in ways that are hard to detect or understand until it’s too late. Due diligence was even impacted by tracking problems from using internal spreadsheets! Strategic leaders in hardware companies need a system like Hardfin early on in order to prevent problems down the road."

There’s a better way to execute hardware financial operations

When finance teams can connect their data together, they see meaningful value: more revenue, faster cash, productivity savings, cost savings, and more. That’s why we built Hardfin. We knew financial operations was broken for the equipment industry, where the financial stack is complicated and essential. But we also saw what was possible—a complete system to manage your hardware financial operations.

Whatever model you’re offering—hardware as a service (HaaS), machine as a service (MaaS), device as a service (DaaS), equipment as a service (EaaS), robots as a service (RaaS)—making billing successful is easy… if you have the right tools. We help hardware manufacturers connect Sales and Finance to turn assets into cash faster—offering complex sales programs without the usual billing headaches.

From a finance leadership perspective, Hardfin means leadership no longer has to keep both the operational and the strategic in manual models: we provide a unified view of both summary information for the business and detailed financial operations for each asset.

"As you reach the point of having dozens of customers, where every one of them has multiple assets across multiple locations – end-of-month billing becomes incredibly cumbersome as you need to go through one by one and click to review and confirm. It's true that accounting software typically has recurring invoices; but given an environment where billing may vary based on activity, productivity, or uptime – being able to push the approvals out to our Ops team on location is very valuable."


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1. This doesn’t include accounting for the contract, which involves an entirely different set of triggers.