Recently, the Wall Street Journal reported that companies are finding revenue recognition compliance costs to be higher than expected, according to a survey by Ernst & Young LLP. The article suggests that investment in systems and processes to comply with the new rules for revenue recognition and accounting could deliver cost savings in the long run.
Reporter Tatyana Shumsky writes: “Public and private companies estimate the transition to the new rules will cost, on average, $3.3 million per company, according to the survey, which was conducted last October and November. That’s up from a forecast of $1 million by 55% of finance and IT professionals EY surveyed in 2017.”
In the study, “Eighty-eight percent of companies said they found it challenging to compile the data needed for new regulatory disclosures for revenue recognition, the report said, and more than 80% will rely or have relied on manual workarounds to complete their reporting.”
This is certainly the case for many of our customers who have recognized the need for a better way to comply with these new revenue accounting rules and the mounting costs to their business. Leading enterprises are turning to RecVue to manage their monetization processes, including compliance with standards like ASC606, IFRS15, and ASC 842. By delivering an integrated billing, revenue recognition and revenue management system in one platform, RecVue delivers a single source of truth and automates the entire monetization process: the single platform approach improves the ability to achieve compliance and increases confidence in the evidence of compliance for auditors and executive management. RecVue also saves time and money by reducing complexity and errors.
In one particular case, ACI Worldwide, turned to RecVue to automate complex usage-based calculations and the consumer price index application. By working with RecVue, ACI was able to combine 3 separate billing systems across four acquired companies, allowing the finance team to manage contracts and automate billing across more than 100,000 pricing models. In addition, ACI was able to integrate 80 plus distinct usage systems directly into the billing engine. This type of investment in technology and systems resulted in 73% less manual intervention by the team, which translates into highly significant cost savings for the organization. In addition, they now have a single source of cohesive data for advanced analytics and forecasting. With this type of powerful capability, they can gain insight into the entire population of usage data and billing transactions to identify revenue leakage and potential opportunities for new revenue.
To read the full Wall Street Journal article, you can check it out here: https://on.wsj.com/2GDQNKC