The introduction of the ASC 606 / IFRS 15 revenue recognition guidelines added additional pressure to IT departments, as companies are expected to recognize revenue in tandem with customer contracts and produce the associated data in reporting. ASC 606 compliance now requires organizations to recognize revenue as value is transferred to the client, often irrespective of the billing process. This creates new challenges as it breaks the fundamental architecture of ERP and legacy systems. This creates a situation where billing fulfillment and revenue recognition systems don’t interact and has caused a significant migration back to spreadsheets.
The IT department is tasked with making these connections and reports happen, despite the complexity of the tasks and the number of resources required. SOFTRAX offers the world’s only system, the SOFTRAX Revenue Management System (RMS), that combines best-in-class automation for one-time, milestone, subscription, consumption, and renewal billing and complex revenue recognition in a single solution. This revenue accounting platform acts as a layer between existing CRM/CPQ and ERP systems to take the burden of reporting and integration from the IT department.
Revenue Management can bog down even the most well-staffed and active IT department, considering all of the facets the functions involves, including the need to:
SOFTRAX can add these functions and more without any extra strain on the IT department.
ASC 606 / IFRS 15 is guidance developed by FASB and the International Accounting Standards Board (IASB) to drive consistency in financial reporting across industries through a five-step model for revenue recognition. Its goal is to create a standard method of recognizing revenue at the contract level for companies in the public, private, and non-profit sectors. The data required to meet the compliance tenets of ASC 606 / IFRS 15 is found in the revenue recognition, billing, and contract systems, meaning that an IT department’s best bet is a system that can automate revenue recognition according to the five steps of the standard. SOFTRAX is well-versed in ASC 606 / IFRS 15 compliance and can automate your reporting on Day One. Our solutions are designed to seamlessly evolve with the changing financial requirements that come with business operational adjustments or compliance modifications, so we will keep you ahead of the game and focused on your core responsibilities.
Do you know the five steps of ASC 606 and the impact of them on your revenue? The SOFTRAX ASC 606 Checklist can help.