The countdown to ASC 606 is quickly approaching for private companies. December 2018 will be here before you know it. “This is a big deal. For many companies, this has the potential to impact sales, go-to-market strategies, compensation plans, product roadmaps, sales commissions, everything.” The need to track revenue with greater control and visibility has spurred the adoption of a more sophisticated ERP, such as Sage Intacct.
We’ve worked with our clients to help them prepare and ensure that they have the right toolsets in place to adhere to the new guidance. In May 2017, RapidRatings chose to adopt Sage Intacct Contracts Billing and Contracts Revenue Recognition functionalities, as well as integrate their Sage Intacct environment with the Salesforce CRM platform. The Contracts Module helps ease the pain of using manual methods and disconnected applications, in addition to leveraging best-in-class revenue management capabilities. The module also allows for dual treatment of contracts according to both ASC 605 and ASC 606. This provides organizations with immediate visibility into how the upcoming guideline changes impact financials.
In an interview with TechTarget, Sage Intacct’s Rob Reid said: “The (FASB) Accounting Standards Codification -- ASC -- is about going in and setting up a contract as the master that drives all of your accounting needs. They're trying to get a separation of the different performance obligations that you have in each contract with a customer, and then recognize that revenue as those are performed rather than recognizing it all upfront or all at the end.”
Transitioning to ASC 606
Transitioning to ASC 606 is a significant responsibility, especially if your current accounting system/software lacks built-in readiness. The Financial Accounting Standards Board (FASB) has issued guidelines for what your business must do to adopt the new standard:
- Identify the contract and thresholds with a customer
- Manage performance obligations and renewals
- Determine the transaction price
- Allocate the transaction price
- Recognize revenue as performance obligation is satisfied
ASC 606 impacts your revenue recognition and financial processes from top to bottom. Businesses that are unable to handle complex contracts within their current accounting software will quickly get overwhelmed with spreadsheets. Having the right technology in place will be your saving grace to help your organization maintain efficiency and reduce risk.
Sign-Up for An Exclusive Series of ASC 606 Events
Leap the Pond’s Vice President and Co-founder, Nancy Fliss, will present at Sage Intacct Advantage in October with RapidRatings’ Finance Director, Elliot Goldman on the topic of how to shorten your revenue close by 300% with Sage Intacct Contracts.
In the session they will discuss:
- How RapidRatings made the decision to move to Sage Intacct Contracts
- Implemented best practice guidance provided by Leap the Pond
- Reduced costs with revenue recognition and commission automation
- Significantly increased invoicing accuracy, reduced their monthly close, and ensured compliance with ASC 606
If you’re interested in learning more about this session let us know. If we have enough interest we will create an exclusive series of online events. Click here to sign-up >
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ASC 606 and How it Might Impact Your Organization – A Resource Guide
There’s a change happening in accounting. The new Revenue Recognition rules, ASC 606, is creating a major shift in how businesses handle accounting. Nearly every organization (if they haven’t already) is going to be looking at how they have been doing their accounting and how they are going to adopt the new standard. The new ASC 606 standard provides a comprehensive revenue recognition model intended to increase financial statement comparability across companies and significantly reduce the complexity in today's revenue recognition standards. Read more >