Top Tips for CFOs preparing for the new standards
Does a mention of ASC606 or IFRS15 bring you out in a cold sweat? Putting that preparation off for another day? Let us walk you through a few key steps and transform the transition from what might seem to be a problem into an opportunity for strategic wins across your entire business. We’ve recently published a useful guide for CFOs who may be contemplating the best route to take and you can find a brief summary of top tips below.
Firstly, recognize that you’re not alone if you’re yet to tackle the transition. KPMG reports that more than 60% of their survey respondents admitted to being behind schedule. In fact, only 13% of companies surveyed by PwC said they have fully implemented the major standards overhaul.
Remember those important dates. The deadline for compliance with the new standards is Dec 15, 2017 for public companies and Dec 15, 2018 for private.
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We’ve identified three key challenges you may face when preparing and should factor into your considerations:
1) Assessing impact. Evaluate your primary revenue streams to identify the revenue recognition changes required. If you aren’t armed with the proper information, making the best business decision can be difficult.
2) Evaluating effort. Know the scope of work required so you can assemble the right plan, team, and budget. Several factors will impact your resource allocation and cost calculations.
3) Achieving compliance. Deliver the right reports to internal and external stakeholders. Be aware that About 50% of spreadsheet models used operationally in large businesses have material defects.
The right cloud application can help you resolve all of these challenges. Our top tips on what you should look for in a solution to help you with revenue recognition include:
1) Support for powerful, flexible data models
2) Seamless integration with other applications
3) Configurable templates and rules
4) Forecasting capabilities
It’s true that meeting the new compliance standards will take time and careful planning but it shouldn’t be a dreaded process and the right cloud application will certainly ease the pain.
Organisations of all sizes can use it for positive transformation, whether the opportunity to evolve more easily to meet customer demands in the new services economy or help to deliver a complete picture of your organization’s revenue, and more.
The transition can leave you and your organization with a smile on your face if you tackle it in the right way. To be fully armed with guidance on how to prepare, please download our full CFO guide here. And may your road to complying with the new standards be smooth and paved with golden opportunities.