Staying on the top of revenue recognition game can happen when you’re able to keep pace with dynamic licensing and distribution models, manage complexities of multi-element contracts and comply with strict Sarbanes-Oxley and SEC regulations. Along with this, you’ve got to consistently lead in ever-evolving revenue recognition rules that cover EITF 08-01 (ASU 2009-13) and 09-03 (ASU 2009-14) standards.
Some of the on-premise ERP systems such as Microsoft Dynamics GP and SAP aren’t found to have kept pace with these changes. Due to this, finance teams generally resort to complex spreadsheets that limit visibility and lead to significant risk of errors as well as non-compliance.
There is a simple yet powerful concept behind the cloud-based revenue recognition software solution that provides absolute support for all key revenue recognition standards, automated calculation and real-time dashboards via a fully integrated solution. The outcome is easy use, flexibility, visibility, better data integrity and minimized ongoing maintenance.
An effective software system for revenue recognition requires a right combination of software and processes along with flexibility to adapt to dynamic conditions. Cloud software like NetSuite can provide required foundation and anytime, anywhere access for primary finance stakeholders. Proper revenue recognition touches every process, from sales order management to everything up to revenue forecasting. Four keys to an integrated approach in any revenue recognition software system are traceability, centralization, efficiency and visibility.
Each step from the beginning of the process including sales order, invoice, revenue recognition, journal entries and general ledger; should be completely traceable. The traceability allows you the flexibility to modify any particular details at any step.
The second key to effective revenue recognition is to have one and only central transaction history. With this, you get all revenue recognition aspects covered and as a company you can make changes as per requirement, adapt to new regulations and modify the reporting processes as well.
A revenue recognition software’s biggest downfall is the need for constant balancing between multiple systems. A single integrated system eliminates this complexity by pulling it together in just one system and enabling it to deliver substantial gains in form of productivity and efficiency.
Visibility is an important aspect to effective revenue recognition, without which it’s not possible to look at real-time information. An effective cloud-based system provides fast, real-time and efficient reporting and forecasting that can further be used to study and understand information.
Integrated approach ensures understanding of every step in the revenue recognition process. Coupled with on-demand cloud-based delivery, your organization can easily realize the four keys required for effective revenue recognition. Fully integrated with financials cloud-based revenue recognition software will enable your company to move complex spreadsheets to a more productive approach that helps in enhancing visibility, accuracy, speed and compliance.