Over the next three years, many public companies will have to undergo significant changes in order to comply with the new FASB and IASB revenue recognition standards. The new standards, adopted in 2014 and slated for implementation in 2017/2018, will replace substantially all existing US GAAP and International IFRS literature on revenue recognition.
Fortunately, for companies that are running SAP business environments, there is a new fully integrated solution, the SAP Revenue Accounting and Reporting application that not only eases the transition; it also can help leverage the new revenue standards into a significant business productivity advantage.
Although much of the industry buzz lately has been on the one-year deferral of go-live requirements from January 2017 to January 2018, it’s important not to get lulled into complacency. When you consider the new standard’s built-in mandate for retrospective adoption that essentially requires a two year look back period, most companies were already late under the old schedule and are still late today!
In order to get ahead of the curve and to get the most out of the new SAP Revenue Accounting and Reporting Application, companies need to pay attention to these key steps for success:
- Don't wait to get started
- Update your Business Requirements Documentation
- Understand the Cross-Functional Impacts of RevRec Changes
- Align ALL of the Key Players
- Leverage the new SAP Application's Financial Integration Tools
- Plan and Staff for Success
- Run Parallel and Run Early
The new SAP application can deal with multiple accounting principles and their specifics in revenue recognition and presentation for one region or for each operational document. It also provides analytics for revenue accounting to address legal disclosures and management reporting.
SAP Revenue Accounting and Reporting manages revenue recognition from a finance point of view. It decouples operational transactions from accounting so that various operational transactions can be accounted together no matter where the operational data is processed.
With SAP Revenue Accounting and Reporting, it is possible to automatically determine these multiple element arrangements from an accounting perspective based on a flexible rules framework. Additionally, accountants have the ability to change how revenues are allocated and recognized manually based on given customer arrangements.
To get more detail on the above topics and insights into leveraging the new SAP application, you can download the newest eBook: Checklist for Success with SAP Revenue Accounting and Reporting.