In this series on the decision making around supporting ASC 606 with revenue recognition automation software, the project manager assesses the last identified issue. The sixth issue faced at this growing company was being able to address the current situation of silo-ed and disparate systems that held revenue data needed for ASC 606. The opportunity to create a single source of truth from which they could then pull the reports they needed for earnings reports, GAAP reporting, internal reporting and financial planning, was attractive.
A single source of truth enables efficient financial planning and reporting
"We’ll be able to comply fairly easily with the SEC requirements."
Q: You mentioned reporting capabilities earlier, how will automation affect your reporting?
With the new 606 there are some fairly significant reporting requirements. Most of the historic data should be able to come directly from reports that we had manually created. The good news is these are standard and are part of RevStream. The data is all in one system. We’ll be able to comply fairly easily with the SEC requirements. And, the CFO is excited by the daily reporting, He is looking forward to real time posting of actual revenues, that’s the biggest piece for him.
Q: How will this impact your day-to-day work?
My day-to-day is making sure the SEC reports are filed timely and accurately. I do believe this tool will assist us in both areas. The timeliness, if we can speed up our close by one week, even if we don’t file a week earlier, it gives us one more week to verify that the information we’re getting is correct and a week earlier to our auditors, and accuracy obviously. If we have a system that is SOC 2 compliant it gives you just a little bit more security that the data you are publishing is 100% accurate. Not that we have ever had a problem with our previous data but it just gives you a little bit of reassurance.
The telecom company involved had the knowledge and resources to build a viable revenue recognition software program. After fair consideration however, they chose to buy an out of the box solution, mitigating areas of concern expressed both internally and from their BOD. Buy over build, enabled them to move quickly, become self reliant in terms of change management, and have an audit approved system.
Management teams, and even more so in public companies, need dependable, accurate information that they can produce in a timely fashion. Automation does this.
Download the full series of Issues Revenue Management Teams Face - ASC 606