Enterprise Resource Planning Systems are vital to a company’s success. However, these systems need to be maintained and enhanced to protect their value and serve a company’s changing regulatory needs in an ever changing business landscape. For instance, new business models such as IoT, recurring revenue, and changing regulations (ASC 606 and IFRS 15), all put pressure on back office processes to keep up.
What options do companies have when it comes to updating their existing ERP and financial systems? There are four that come to mind
- Customization of existing ERP systems: Where companies choose to continue to invest more money in their existing ERP system by having custom code written to help manage new revenue accounting requirements.
- Spreadsheets and manual workarounds: Where companies reach the limits of their existing ERP system and turn to spreadsheets or manual workarounds.
- Rip and Replace: Where companies are lead to a decision to replace their existing ERP software with a totally different financial software.
- ERP Augmentation: Where organizations choose to implement an out of the box module specifically designed to manage a broad class of revenue accounting requirements in integration with existing ERP systems.
But what option is the best?
There are those that suggest it is time to rip out your existing infrastructure and start over. Others promote migrating work to an increasingly large set of customizations or spreadsheet models. Still others promise future product updates that never seem to come to fruition.
If you’re preparing to respond to the new revenue recognition guidelines from the FASB and IASB, a good place to start is our newly-released “Guide to ERP Augmentation for Improved Billing and Revenue Recognition.” You can download a copy by clicking on the link below.
Stay tuned for our blog post series “Analyzing ERP Options” which takes a deep dive into each of the four options. Subscribe to the Softrax revenue recognition blog today and stay up to date on future posts.