What will be the impact on financial results?
According to FASB, the new standard will: remove weaknesses in revenue reporting requirements; provide a framework for addressing revenue issues; improve revenue recognition practices; provide more useful financial statement information and improve disclosure requirements.
Remember that old saying that “hard work pays off…eventually”? These process compliance changes are basically going to be the foundation for a next-generation revenue engine that features a fully automated workflow. By adopting a flexible system that adapts to the new requirements – with a modern, agile financial management/ERP system like NetSuite – organizations will be poised for future regulatory changes in the business landscape.
The time for getting started on this change is now. Hopefully you have already taken the time, or plan on doing so soon, to develop a transition plan, review your existing contract and revenue processes, initiate an auditor’s review of policy and scenarios and have existing financial systems assessed.
The next step is to define business process requirements and internal controls, draft disclosures, execute data retention processes, develop training, define financial system requirements and select a vendor.
Once those items are complete, you will need to spend the majority of the coming year to develop reporting processes, implement internal controls, implement training strategy and deploy financial systems.
User acceptance testing and reporting finalization will be the final step of the two-year preparation to meet the January 2018 adoption date. It’s important to outline your current state in order to identify gaps and align a system internally.
Contact our NetSuite professionals to discuss a solution pathway that will customize a functional system to align your needs with the new revenue regulation requirements.