How to transition to the new revenue recognition standards—ASC 606 & IFRS 15
After three days of sessions, hands-on training, and more, FinancialForce Community Live closed with a panel that affects every business: “Successfully Managing the Impact of ASC 606.” As the deadline for public companies (December 15, 2017) to comply with the new revenue recognition guidelines quickly approaches, this was an important topic for many attendees.
Participating panelists—including three FinancialForce customers and one special guest from PwC—each had unique, first-hand experience with the new rev rec standards.
- Colleen Brennan, Director Global Advanced Services, CenturyLink
- Joe Grover, Partner, LiquidHub
- Edward Farias, CFO, Lieberman Research Worldwide
- Sydnie Karras, Accounting Advisory Director, PwC
As the panel discussed how to get management on board and working with all departments on the transition process. Fred Studer, FinancialForce CMO, asked each panelist for a nugget of advice on how to get ready to comply with the upcoming revenue recognition deadlines.
The deadline to comply is just around the corner—but that’s no reason to panic. It’s important to stay calm, make educated decisions, and get everyone on board from the beginning.
“We are running out of time but you still want to be logical,” said Sydnie. “Companies are starting to panic a bit and skip the logical steps. A project like this should start with the accounting assessment and making sure everyone is on board with what the revenue recognition model will look like under the new standard.”
This is especially significant for public companies, whose deadline is less than six months away. Private companies have an additional year but that doesn’t mean the process should be delayed. KPMG reports that more than 60% of their survey respondents admitted to being behind schedule.
“Don’t procrastinate,” said Edward. “You need to go out there and understand what the standards mean for your company. Understand it’s going to take a lot of time, resources, and probably some monies to get implemented, so create as long as a runway you can before your compliant day.”
Choose the right system
Pick the solution that best fits your business and it will also get you to where you need to be in a timely manner. A single cloud solution can reduce friction and set your company up for a smooth transition.
“Choose a solution that requires the least amount of integration, because time is running out and integration takes time,” said Joe. “Start with the end in mind, think about the data and reporting that you are going to have to do and choose a system that helps you get there fast.”
Reach out for help
Don’t be afraid to ask for advice. Reach out to people you know that are working on or have already completed their transition to the new rev rec standards.
“Do your homework, do some reading, reach out to some acquaintances at other companies to see how they are handling it,” said Colleen.
It is essential to have all departments on the same page with the ASC 606 / IFRS 15 standards. Finance, Legal, IT and more will be involved in making decisions, choosing the right system, working on contracts and implementing the solution so everyone needs to know what the plan is from the beginning.
No matter what your deadline is start preparing now. Let us help you with the Guide to Rev Rec Challenges and Solutions. And if you are in the San Francisco Bay Area, you can attend the “Solving ASC on Salesforce” event on 8/23. Register here.