2016 is primed to be a breakout year in revenue. The new revenue recognition guidance is not going away. Deadlines to put it to use are rapidly approaching. We’re already two months into a year corporations choosing the full retrospective method of adoption will have to recast. Public companies must start reporting revenue under ASC 606 in 2018.
A case of the panic sweats is understandable. We’ve been deep in the weeds on this process as much as any organization and the ‘around-the-corner-ness’ of the timelines is enough to bring out sympathy panic attacks on behalf of our customers and customers-to-be.
Leeyo Software is here to help with our 2016 RevRec Action Plan.
You can register now for Leeyo’s 2016 RevRec Action Plan and have access to a year’s worth of valuable content from leading industry experts to help walk you through a potential implementation of the new revenue recognition guidance from start to finish, as well as an exclusive implementation timeline calendar. To register, click the following link:
Every plan starts somewhere and ours begins not with baby steps, but a lunging, sure-footed Step 1: Get Started focused on internal structure and communication.
Getting started on this transformative journey requires active participation and a willingness to make waves. You will need to build an internal team; become a true change agent within your organization; perform an initial assessment of the impact of the new guidance; communicate that impact and outline your company’s strategy. To sum it up: begin by building from within and communicating across.
Amanda G. Carrillo, Pre-Sales Accounting Manager for Leeyo, has a well-rounded financial resume including stints as revenue accountant, finance analyst and operations manager in direct engagement with executive management and IT personnel overseeing numerous strategic workflow efforts. We interviewed Carrillo at length on “Step 1: Get Started” and offer a few key takeaways here. The full interview will be available as part of Leeyo Software’s new communication platform, the “Ask the RevRec Experts” Podcast (Coming Soon!).
“I think this is one of the most important things we have on our (RevRec Action Plan) roadmap, mainly because a lot of people don’t know where to even start,” said Carrillo.
“Oftentimes, people approach (new guidance) from the point of view that it’s not really going to impact me that much, not a lot of our stuff is changing, we aren’t adding any new products and think everything is going to stay the same,” she said. “That tells me you haven’t taken the time to dig deeper, do some samples to really figure out what it means and talk to an auditor. If you did, you’d realize things are going to change, whether big or small, they are going to change. This guidance is completely different.”
Carrillo said revenue accountants may defer to management for decisions on when to communicate and what actions to take, but they shouldn’t.
“If I do some research, it’s OK to go to my manager and say, ‘I think our team should start working with a project manager and figure out resources because it’s going to take a lot of extra hours and a lot of extra manpower to figure out what we need to do and where we need to go,” she said.
Who are the key people necessary when a company is building an internal team for this effort?
Carrillo said from her prior implementation experience, while players from IT, revenue and a project manager are must-haves, a perfect world team would consist of representatives from each department in a company’s quote-to-cash process.
“You really want to understand the impact from the new guidance and if it means you have to change the way you book something or the way you sell something so you can process it better for revenue, what better way than to have the conversation before you go and implement something brand new,” she said.
What would you tell a company that hadn’t started preparing for the new guidance?
“You want to shake them and go, ‘What are you waiting for?'”
Alluding to the limited amount of time revenue accountants have which aren’t spent chasing deadlines, Carrillo said she would start by asking, “What’s keeping you from even looking at the new guidance? Is it some time challenge or something else going on internally? You’ll want to highlight the different areas in which your company needs to work and decide on working with a solution like RevPro that will help start the process from a different perspective.”