Revenue Recognition

Introduction

Revenue recognition tasks are often inefficient and time-consuming, with the resulting summary reporting not detailed or timely. Cloud-accounting solutions can help automate and streamline the end-to-end process by reducing manual processing, and compilation and ensuring businesses remain compliant with the relevant accounting standards IFRS 15 and ASC 606.

Typical Problems

Revenue recognition can be time-consuming and labour-intensive due to the manual process of exporting and compiling data to be re-entered back into the accounting system, causing unnecessary delays with month-end reporting.

Reconciliation of accrued/deferred accounts is traditionally a manual process and is made even more difficult by using summary data posted, rather than the detail required to truly interrogate the data.

Solutions

A cloud revenue recognition solution can reduce manual tasks and speed up the overall process with the implementation of an automated revenue recognition module with multi-currency, multi-entity, and multi-dimensional capabilities.

Moving to a single integrated platform connects all the source data (whether that be opportunities, project milestones, subscription billing etc.) to your accounting system allowing for seamless data flow.

Cloud-based revenue recognition solutions offer businesses a far more flexible level of reporting and insight as well as enabling the end-user to easily reconcile accounts with built-in tools including transaction reconciliation and reconciliation reports.

Other key features include allowing for either fixed or usage-based revenue recognition schedules/templates which are independent of billing, revenue forecasting and expense amortization.

Benefits/ROI

An integrated and automated revenue recognition solution allows end-users to recognise revenue easily across companies, gain deeper insight with powerful analytics and reduce the time taken to post revenue to the general ledger.

Businesses can take full control of revenue recognition and stay IFRS 15/ ASC 606 compliant, automate the posting of revenue recognition and improve the accuracy of reconciling the accrued and deferred general ledger accounts.

Ultimately, reducing the overall time taken to “close the books” at month-end and improving efficiencies across the finance team.

References

Example integrations include

• Salesforce/Billing Central/PSA/FFA <> FinancialForce Revenue Management
• Sage Intacct – Advanced revenue recognition