ASC 606, set forth by the Financial Accounting Standards Board and IFRS 15, set forth by the International Accounting Standards Board (IASB), are set to change the way that businesses operate and account for revenue. The standards, announced May 2014, have been at the top of mind and part of discussions for financial professionals in recent months.
#IntacctChat: ASC 606/IFRS 15
As the first solution designed automate the revenue recognition process under new ASC 606/IFRS 15 guidelines, Intacct has been leading many of the discussions as companies start to do their homework before making moves as the guidelines begin to take hold. In yesterday’s blog, we covered some of the key terms, dates, and considerations for companies as they look to understand the new guidelines.
To address some of the questions and challenges that accounting professionals will face in coming years, Intacct hosted its second Twitter chat (#IntacctChat) on ASC 606 and IFRS 15, demonstrating some of the changes that are on the horizon for businesses and how to overcome some of the challenges that will stem from these changes:
How Will ASC 606 and IFRS 15 Impact Businesses?
The new guidelines may be targeted at, but will not only affect accounting. Business processes will need to change. Sales departments will need to adapt. Forecasting will be impacted. Without taking steps to prepare now, companies face an insurmountable challenge that could damage their reputation once the standards take effect.
Failing to meet the ASC guidelines can result in audits, distrust from stakeholders, and could even cost financial professionals their jobs. An example of this is IT software and services provider Tangoe, whose CFO (and later, their CEO) resigned amid a scandal over incorrect financial statements for the years 2013, 2014, and the first three quarters of 2015 for inaccurate usage of ASC 605-25 and ASC 985-605.
— Vijay Ramakrishnan (@vijayramak) June 28, 2016
How Can Businesses Prepare?
While different industries will be affected differently, the first step in becoming compliant is to form a steering committee consisting of finance experts, designing a step-by-step plan to adopt a software ready for the standards, educate stakeholders, and move your organization into a compliant future.
— Jennifer Reiserer (@jlreiserer) June 28, 2016
Noting this, Excel is not the answer. Using a spreadsheet for finance is not only time consuming, but it is dangerous, as spreadsheets are error-prone and inaccurate, and one error can derail your entire revenue recognition process.
With Intacct’s new Contract Revenue Management Module, you can ensure compliance with ASC 606 and IFRS 15, as well as current standards set forth by the SEC, FASB, and AICPA without touching a single spreadsheet.
Beyond ASC 606: How Intacct Has Become the Go-to Solution for the Subscription-Based Businesses
Not only does Intacct automate revenue recognition under ASC 606, it also is a complete solution for subscription-based businesses looking to save time and see deeper insights into their revenue.
Learn more about Intacct’s role in helping your company to ensure ASC 606 Compliance by watching the video below.
More and more subscription-based businesses are choosing Intacct every day in order to subscription and recurring revenue management for real-time updates to accounting and billing for discounts, usage, renewals, upgrades, changes, and cancellations.
Learn more about Intacct’s Revenue Management Software by downloading Mastering the Complexity of Revenue Management and by watching the latest Brittenford Webcast, Secrets to a Complete Quote to Cash Management Process highlighting Intacct’s tight integration with Salesforce, and to learn even more, contact us to learn about a free 30 day trial.