Revenue Management Solutions to Remain Compliant with the SEC
By Anne Coyle
Posted on Feb 4, 2022 1:54 pm
Throughout 2021, SOFTRAX released industry-specific blog entries that explored financial reporting challenges and SEC comment letter trends. These posts can be found on the SOFTRAX Blog and feature information on leading revenue management solutions for complex billing, revenue recognition under ASC 606 and IFRS 15, and more.
This past year, the Securities and Exchange Commission’s Division of Enforcement struggled with various circumstances, such as remote working conditions and a new chairman. This led to a 3% decrease in total actions filed compared to the prior fiscal year.
The SEC is expected to rebound from this downward trend in cases. It recently released the fall regulatory agenda which lists numerous rules the agency plans to propose or establish in 2022. Companies can prepare by expecting heightened SEC prioritization of key areas such as environmental, social, and governance issues (ESG), cybersecurity and data privacy disclosures, digital assets, and risk factors.
Risk Factors and Solutions
Market risk, credit risk, liquidity risk, and operational risk are all common forms of financial risk that companies should take a fresh look at in the new year. In addition to current risks related to the ongoing pandemic, companies should consider the updated risks related to climate change, ESG, cybersecurity and data privacy, labor shortages, and supply chain issues that add complexity to the factors that already exist.
Tyler Technologies, a provider of end-to-end integrated technology solutions and services for local governments, identified problematic areas in their own operating environment at a point in time that included:
Inefficiencies existed in Tyler’s reporting processes
Many overly manual and labor-intensive processes
Complicated processes that led to difficulties in the timely management and analysis of data
To comply with increasingly complex revenue recognition regulations, increase visibility, and manage risk, the company adopted SOFTRAX Revenue Manager. Going to full automation and operationalization via SOFTRAX resulted in many big wins for the company, including a smoother and quicker close and compliance with 100% of ASC 606’s disclosure requirements.
“We got a dreaded SEC Comment Letter. On our 2018 10-K and our Q1 filing. So they were looking at 606 and all disclosure requirements. We had three comments. I had the letter, and response, drafted in a couple of hours. And then we were done with it. Of course, it had to go through all the other people that had to look at it, but the initial drafting was that quick.”
Michael Smith
Vice President & CAO
Ensuring legal compliance and appropriate financial reporting should be a main priority for companies in 2022. Read more examples of customer experiences and success on the SOFTRAX Customer Testimonials page.
Trends in Comment Letters
With comment letter topics consistent year after year, SEC comment letters issued during fiscal year 2021 reveal trends that are likely to continue in years to come. Key comment trends companies should take note of include accounting and disclosures related to the COVID-19 pandemic, the use of non-GAAP measures, and revenue recognition.
This past year, SOFTRAX observed disclosures surrounding performance obligations, the timing of revenue recognition, price allocation to unsatisfied performance obligations, and transaction price considerations that received the most attention.
Non-GAAP financial measures remained in the top spot on the list of the most frequent topics in SEC staff comment letters for the year and comments in this area are expected to remain high.
Best Solutions for Compliance with SEC Requirements
For over two decades, hundreds of corporations have used SOFTRAX solutions to optimize revenue, reduce operating expenses, streamline compliance, and gain visibility into their business performance. Our software provides flexible, robust revenue management capabilities that grow and change with your business to stay in alignment with ASC 606 & IFRS 15 guidance, Sarbanes Oxley, and the myriad of existing financial regulations.
SOFTRAX’s leading revenue management software allows companies to easily manage complex billing, contract renewal management, and revenue recognition under ASC 606 & IFRS 15, including complex allocations, deferred revenue, fair value determination, and more, without the need for spreadsheets.
Contact SOFTRAX for more information about the end-to-end financial software solutions that eliminate inefficiency, confusion, and risk through operational and accounting management processes such as complex billing, revenue recognition, contract renewals, order management, and more.
Blog
Revenue Management Solutions to Remain Compliant with the SEC
Throughout 2021, SOFTRAX released industry-specific blog entries that explored financial reporting challenges and SEC comment letter trends. These posts can be found on the SOFTRAX Blog and feature information on leading revenue management solutions for complex billing, revenue recognition under ASC 606 and IFRS 15, and more.
This past year, the Securities and Exchange Commission’s Division of Enforcement struggled with various circumstances, such as remote working conditions and a new chairman. This led to a 3% decrease in total actions filed compared to the prior fiscal year.
The SEC is expected to rebound from this downward trend in cases. It recently released the fall regulatory agenda which lists numerous rules the agency plans to propose or establish in 2022. Companies can prepare by expecting heightened SEC prioritization of key areas such as environmental, social, and governance issues (ESG), cybersecurity and data privacy disclosures, digital assets, and risk factors.
Risk Factors and Solutions
Market risk, credit risk, liquidity risk, and operational risk are all common forms of financial risk that companies should take a fresh look at in the new year. In addition to current risks related to the ongoing pandemic, companies should consider the updated risks related to climate change, ESG, cybersecurity and data privacy, labor shortages, and supply chain issues that add complexity to the factors that already exist.
Tyler Technologies, a provider of end-to-end integrated technology solutions and services for local governments, identified problematic areas in their own operating environment at a point in time that included:
To comply with increasingly complex revenue recognition regulations, increase visibility, and manage risk, the company adopted SOFTRAX Revenue Manager. Going to full automation and operationalization via SOFTRAX resulted in many big wins for the company, including a smoother and quicker close and compliance with 100% of ASC 606’s disclosure requirements.
Ensuring legal compliance and appropriate financial reporting should be a main priority for companies in 2022. Read more examples of customer experiences and success on the SOFTRAX Customer Testimonials page.
Trends in Comment Letters
With comment letter topics consistent year after year, SEC comment letters issued during fiscal year 2021 reveal trends that are likely to continue in years to come. Key comment trends companies should take note of include accounting and disclosures related to the COVID-19 pandemic, the use of non-GAAP measures, and revenue recognition.
This past year, SOFTRAX observed disclosures surrounding performance obligations, the timing of revenue recognition, price allocation to unsatisfied performance obligations, and transaction price considerations that received the most attention.
Non-GAAP financial measures remained in the top spot on the list of the most frequent topics in SEC staff comment letters for the year and comments in this area are expected to remain high.
Best Solutions for Compliance with SEC Requirements
For over two decades, hundreds of corporations have used SOFTRAX solutions to optimize revenue, reduce operating expenses, streamline compliance, and gain visibility into their business performance. Our software provides flexible, robust revenue management capabilities that grow and change with your business to stay in alignment with ASC 606 & IFRS 15 guidance, Sarbanes Oxley, and the myriad of existing financial regulations.
SOFTRAX’s leading revenue management software allows companies to easily manage complex billing, contract renewal management, and revenue recognition under ASC 606 & IFRS 15, including complex allocations, deferred revenue, fair value determination, and more, without the need for spreadsheets.
Contact SOFTRAX for more information about the end-to-end financial software solutions that eliminate inefficiency, confusion, and risk through operational and accounting management processes such as complex billing, revenue recognition, contract renewals, order management, and more.
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