Adding Revenue Compliance to Your ERP Systems
Compliance Week, the leading resource on corporate compliance and governance for U.S. public companies, took a recent look at enterprise resource planning software vis-à-vis its ability to satisfy a company’s financial reporting requirements, such as those mandated under Sarbanes-Oxley.
ERP systems — like those from SAP, Oracle, IBM and Microsoft — are designed primarily to integrate the divisions and functions of a company across boundaries into a single, coherent whole so that everyone is connected to the same shareable information and can easily perform their roles in company-wide processes — fulfilling orders, for example."More than 200 accounting rules deal with
revenue recognition. A lot of companies are
struggling with those rules and how to
apply them accurately and consistently..."
Compliance Week. While this transactional processing will remain a core
function, other critical needs have evolved that today need to be supplemented with additional software. These areas may include detailed expense management, contract management, supplier performance management and — increasingly — revenue management.
For industries such as technology,
construction, information services and media, where revenue recognition is complex, supplemental software may be necessary to handle revenue analysis, reporting and forecasting.
There are more than 200 accounting rules that deal with revenue recognition and many companies struggle with how to apply them accurately and consistently across their entire business. Since ERP systems typically don’t handle that accounting, much of it is managed in spreadsheets.
Softrax, notes the article, has designed a revenue management application that runs in concert with ERP systems, automating this critical process. "It’s an eye-opener to people that there is an alternative."
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