Are you tired of manually tracking revenue recognition outside your ERP system? With NetSuite, you can easily account for any contract under any revenue standard, for any given set of products and services.
NetSuite’s Advanced Revenue Recognition automates your company’s revenue recognition and complies with new accounting standards, such as ASC 605 and 606, and IFRS 15. With this revenue management module, you can easily defer revenue for recognition across future periods per the rules you configure. NetSuite pushes revenue through this rule based workflow, and automates the creation, update, and posting of revenue records, eliminating manual errors.
The life cycle of revenue recognition starts with the construction phase, or the creation of revenue elements from a source transaction (such as a sales order). Some records and transactions that are used in advanced revenue management include:
It’s critical to correctly configure the revenue recognition attributes on Item records to ensure revenue properly flows through the revenue recognition workflow. The revenue management module supports the following item types:
There are several key fields on items that must be configured for proper revenue recognition, including:
Below is an example of the different revenue recognition related fields available to configure on an item, found on the accounting subtab:
Once Items have been configured, Arrangements and Plans can be created to properly defer revenue.
These can be set to run automatically, or they can be created manually, whenever necessary.
Even with a tool as capable as NetSuite, Revenue Recognition can be a headache. If you’re struggling to properly manage your revenue with NetSuite, Sikich can help! If you would like more information about NetSuite, please contact us at any time! You can also learn about more great tips for NetSuite on our YouTube playlist or our other blog posts.
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