You meant you mentioned something there as well, that I thought was interesting, which is the treatment of revenue. And, you know, there's the ASC 606, its counterpart of IFRS, 15. over in Europe, and, and when we were talking while it's a, you know, mandated over in the US with the 606. That's actually not the case in Europe, but you actually mentioned something interesting in our previous dialogue around the advice that you're providing startups in the EU. You know, I'm whether whether how much attention I suppose they should pay to IFRS 15? Can you maybe tell us a little bit more about that?
Yeah, definitely. So um, for I think half the audience here is between one to 10 million are today. And so that means, likely you're not yet reporting under IFRS, which is a internationally recognized accounting standard. What is most likely the situation is that you're recording a recording rather under local regulatory requirements. However, if you start selling into the US, or you become a global entity, or global business with multiple entities, at some stage, you're going to have to report under IFRS, which means that as a SaaS business, you need to follow the principles of ASC 606. And I'm just going to record what was mentioned in trade reports that I read recently counting today, which said that ASC 606 is probably one of the biggest changes in the accounting industry for over 100 years. And the reason it's, it's been a big change is because fundamentally, there are five conditions in which you need to meet as a SaaS business in order to recognize revenue. And I won't go into detail on those five conditions, because you can actually find it on the chargebee blog, written very clearly. But in particular, why this makes it, let's say, more challenging for companies that are switching from local statutory reporting to IR for us, is that it means that the Foundation, which I heard in the previous session by Ben, when it comes to your bookkeeping, and specifically your general ledger, on your chart of accounts, needs to be done, ideally, accurately from day one. And that's often I would say, not the case for most early stage, European SAS companies, because a lot of your local bookkeepers and accounting firms don't yet have, you know, a wealth of experience when it comes to the nuances of the SAS business. One of the practicalities of that is that they're just not in the business day to day, right. And they're managing lots of different clients. So they're not close to the customers are not close to the leadership in the business. And so what is really important is that you need to have a tool and a process in place to actually recognize revenue according to these principles. And increasingly, so for a lot of companies we work with, we actually use the subscription management solution as a single source of truth, rather than your core accounting system, because it's closest to the truth of where your customer contracts lie, and it gives you the best indication of what is actually recognized revenue for our business.
Yeah, great points. And I think this is all you know, exacerbated with complexity due to the the Agile nature of the businesses that we're just talking about because all those changes that happened to these subscription plans impact the the way that revenue is going to be recognized and when you start getting into hundreds then 1000s of these plans and there's modifications and add ons and changes happening to each one of those customers plans then that's going to impact that, you know, the revenue recognition for each you know, we realized that complexity and heavy lift that this was required I think you alluded to kind of having subscription management platforms being the source of truth and then you know, I've we've, you know, we've added on that that ability for the the revenue recognition piece because it is really complicated. Yeah, I totally agree.
