Still top of mind for accounting teams is compliance with ASC 606, the revenue recognition standard for public companies as of December 15, 2017. While the new rules seek to reduce differences among industry-specific accounting procedures, ongoing compliance with ASC 606 will likely not be so simple.
To determine revenue, companies will have to fully evaluate their customer lifecycle. Prices, terms, and timing of performance obligations must be considered and documented.
Regardless of how extensively the new standard impacts company P&Ls, all must go through the exercise of adopting the standard and maintaining compliance moving forward. Doing so will require changes to current processes to manage contracts, sign-offs, and controls.
That’s where BlackLine comes in.
To finalize revenue recognition conclusions, finance and accounting teams must work cross-functionally with legal and sales teams, among others, to ensure revenue streams and related costs are properly understood.
Workflows will need to be established to boost transparency, allowing all stakeholders to access the information they need, such as payment terms, warranties, service agreements, and more. Technology and automation can help centralize documentation and reduce risk to ensure compliance.
There is less clarity around how these tools can help with the new guidance, and financial close platforms like BlackLine have long helped companies streamline and automate their record-to-report processes.
It’s all about simplifying compliance.
With BlackLine’s Account Reconciliations, Journal Entry, and Task Management products, companies can implement intelligent workflows to create rules-based processes, centralize documentation, and eliminate the risk involved with manual processes and disparate systems. BlackLine Compliance can also help close the loop with built-in risk and controls assessments and documentation.
Tasks can be set up to ensure necessary steps are completed each reporting period, and to provide visibility into the status of those items.
In addition, balance sheet positions and P&L activity can be reconciled using templates that provide best practices and limit or eliminate the use of Excel. Lastly, journal entries can be monitored, certified, supported, and even automated in a single integrated platform.
“Trying to manage all data and changes is impossible with Excel. You are guaranteed to make a manual error. The risks of human error or losing institutional knowledge if someone leaves the team are too great,” says BlackLine Controller Patrick Villanova.
Imagine uncovering an error in a complex spreadsheet formula after having to verify the details of a contract, or having another spreadsheet altered because several groups need to access the file. This adds even more work to the already laborious task of updating data for compliance.
Some solutions will offer a checklist and repository, but that is not enough to combat the real issues at hand. With BlackLine, you can have the most comprehensive integrated solution on the market.
Simplifying compliance, managing risk, and maintaining order for ASC 606 can all be done in a single platform to help accounting teams achieve their goals.
Join our upcoming webinar to learn how to centralize all of your control-related data and processes in one cloud-based system.