In the run-up to new accounting standards ASC 606, Kimble’s Co-founder and Chief Technology Officer David Scott advises finance executives on ways to ensure revenue recognition is tamper-proof in FEI Daily. (Learn more about how to prepare in our new webinar)
In an article featured on the home page of the widely-read news and analysis site for Financial Executives International, David looks at the real world issues around revenue recognition, particularly in the services industry.
The complexity involved in different contract models and lack of visibility across the business can create problems for the finance department. Relying on subjective assessments makes it impossible to achieve a consistent and predictable result, and may result in figures being adjusted or tampered with.
David recommends a rules-based approach, greater collaboration across the business and shared information. “The best way to get to a consistent and repeatable recognition of revenue in service industries is to have a system where finance and delivery collaborate, sharing live and accurate information.” Read the full article.
Kimble welcomes the new revenue recognition standards, as these same requirements have been supported since the software’s launch in 2010. Read our recent press release.
Find out more about how to prepare for ASC 606 and IFRS 15 by attending our new webinar, “Get Ready For The New Rev Rec Standards,” featuring Rev Rec expert Julie Farr of Isosceles Finance.