Revenue Recognition Criteria: Want ASC 606 Compliance?

Connect Finance & Sales Across Your Quote-to-Cash Process

The quote-to-cash process is more complicated than ever, thanks in large part to ASC 606 compliance, the new guidelines for revenue recognition criteria. Called the most sweeping accounting change in decades, ASC 606 impacts sales as well as finance. It’s more critical than ever for these two departments to stay connected—both on an organizational and process workflow levels. For that to happen, your CRM and ERP software need to function as one system.

The webinar Connect Finance and Sales Across Your Quote-to-Cash Process discusses how the deep integration between Sage Intacct ERP and Salesforce CRM streamlines contract management in order to achieve compliance with ASC 606. To unify sales and finance and ensure consistency throughout the quote-to-cash process, Sage Intacct developed a solution around the customer contract. All of the elements that make up the financial relationship with a customer are captured in the contract to create a single source of truth that can drive billing, accounting, and reporting in an automated fashion.

Each contract line item is defined in Salesforce as a single contract to ensure accurate revenue recognition in Sage Intacct. Similarly, add-on opportunities put into the Salesforce contract are reflected in the original contract to ensure ongoing compliance with ASC 606.  And Salesforce Chatter enables communication between sales and finance to speed up approvals, resolve exceptions, and drive faster revenue.

Separating billing and revenue creates efficiencies and improves compliance

Salesforce and Sage Intacct allow the most sophisticated billing models. Users simply define the billing template or rule for each contract line item, and the system auto-generates the billing schedule. Sales can view all billing details to ensure accuracy and build customer satisfaction. In addition, each line item has separate rules for billing and revenue, so revenue can follow an entirely different model. And as with billing, you can automatically schedule out revenue based on a pre-defined rule.

In support of dual reporting under ASC 606, each contract line item has two revenue schedules—one based on current guidance and the other on ASC 606 criteria. Even if an item has to be recognized differently under ASC 606, the dual revenue treatment of every line item is incorporated within the contract.

On a reporting level, users can get a real-time view into financial and operational metrics. You can use a dashboard to assemble a variety of reports—including comparative financial statements of both current and ASC 606 guidance on the same P&L. All of this detailed accounting information occurs and is contained within the contract life cycle. It’s easily and automatically reportable over time at any point in time.

Users can get a real-time view into financial and operational metrics.

Together, Salesforce and Sage Intacct unify sales and finance, eliminating the concept of front and back office. Now, everyone is working toward a common goal—growing the business while meeting complex regulatory requirements. The experts at RKL can help you make the most of Salesforce and Sage Intacct to achieve ASC 606 compliance. To learn more, register for this on-demand webinar or contact RKL today.