The new ASC 606 Revenue Recognition Standard is the redefined way in which companies are now required to report their annual financial data. Like any new regulation or guideline, there is a lot of fine print to ensure compliance.
Many companies have already initiated preparations for this new reporting regulation. However, there are some companies who have just jumped into attempting a complete financial overhaul of their financial data processes which might be needed to comply with ASC 606.
What might not be well understood is that this new compliance regulation can help companies in gaining broader and more valuable insights to make informed decisions.
The ASC 606 is a complex process of reporting revenue earned from sales. Finance experts including CFOs face a multitude of challenges that range from getting the right data set to managing the amortization of expenses across time.
Since this regulation is all about getting the right data, let’s look at a list of action items that a CFO or any finance professionals can take within their company:
#1 Set up a team for data collection. This team can include accounting, audits, and IT.
#2 Collect existing data and connect it with the needs of the compliance regulation.
#3 Identify gaps in the data and new needs that have arisen for compliance.
#4 Create solutions that help achieve organizational needs and implement necessary changes.
#5 Once the changes are implemented, test the results and work toward improvement of the process.
ASC 606 is changing how companies look at their finances and revenue. Depending on he set up of your company, you may need to make minor changes or induce a complete overhaul. Whatever the case, click the link below to see how ASC 606 compliance can work for your company and put you on the path to incredible financial results.