Deferred revenue can be a substantial issue for companies that sell bundled products and services under a single contract. Scheduling, allocating, and recognizing deferred revenue in accordance with ever more complex accounting guidelines and legislative requirements is a source of pain for many businesses because traditional systems do not handle deferred revenue very well.
Business models involving complex pricing schedules, multiple currencies, VSOE (vendor specific objective evidence), and percent complete revenue recognition are particularly challenging. The complex accounting calculations required to comply with guidelines like SOP 97-2, SOP 98-9, SOP 81-1, ASC 605-10-S99L (SAB 101 and 104), and ASC 605-25 (EITF 08-1), can impact multiple elements, future recognition schedules, and multiple general ledger accounts. As a result, determining how bookings flow through deferred revenue to your financial statements is a labor-intensive job.
With SOFTRAX, deferred revenue accounts are all managed automatically based on a single-point of entry for contract data. Once the contract or order is in the system, SOFTRAX takes care of all the downstream deferred revenue issues including challenges such as:
These activities normally cause financial professionals to develop complex spreadsheets that are prone to error, undocumented and hard to audit. This on top of all the time it takes for manual data extraction, cleaning, combining, processing, validating, formatting, and reporting can be staggering. With SOFTRAX, your deferred revenue data is in one repository with annual schedules so you can see accurate and highly detailed views of how deferred revenue flows to your income statement. And your key analytical resources can spend less time figuring out what the right revenue recognition numbers are, and more time evaluating what they mean for your business.
Completely automate revenue recognition accounting tasks
Easily create and manage deferred revenue schedules
Enable more sophisticated reporting and forecasting
Support compliance with Sarbanes-Oxley, SEC and FASB