{"id":113,"date":"2021-08-11T23:44:14","date_gmt":"2021-08-11T23:44:14","guid":{"rendered":"https:\/\/www.thinkastute.com\/blog\/?p=113"},"modified":"2023-11-25T23:46:50","modified_gmt":"2023-11-25T23:46:50","slug":"automating-asc-606-revenue-recognition","status":"publish","type":"post","link":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/","title":{"rendered":"Automating ASC 606 Revenue Recognition"},"content":{"rendered":"<p>Organizations that have already adopted the new revenue recognition standard (ASC 606) may have discovered that it was not a smooth transition. As with any type of change in the accounting standards\/methods, there are deep rooted challenges to overcome; many layers of complexities must be sorted through to ensure your business complies with the Revenue Recognition Standards issued by the Financial Accounting Standards Board (FASB).<\/p>\n<p>If you think all of this sounds daunting, complicated and like an ongoing challenge, you are not alone. Many have asked, \u201cHow can it be simplified?\u201d<\/p>\n<p>Allow us to shed some light on ASC 606 revenue recognition and the steps needed to become compliant. The FASB\/ IASB standards have issued a five-step process for making revenue recognition decisions:<\/p>\n<ul>\n<li>Identify your contracts with customers<\/li>\n<li>Identify the performance obligations in each contract<\/li>\n<li>Determine the transaction price<\/li>\n<li>Allocate the transaction price to the performance obligations<\/li>\n<li>Recognize revenue as the performance obligation is satisfied<\/li>\n<\/ul>\n<p>These are critical steps that should be incorporated early into the accounting cycle and contract execution. However, they are often not addressed until the end of the close process. This can trigger a barrage of email activity. The tempo in the accounting and finance department accelerates as they seek vital information on project updates and a deliverables timeline. These last-minute requests place unnecessary strain on your employees. In addition, there are challenges that companies face as they work to meet ASC606 compliance.<\/p>\n<div style=\"text-align: left;\"><strong style=\"color: #1aa1a1; font-size: 25px; line-height: 32px;\">Current Challenges in Recording ASC606<br \/>\n<\/strong><\/div>\n<div class=\"blog_margin30\"><\/div>\n<p><strong>1. Reliance on Spreadsheets:<\/strong><br \/>\nAccountants will readily admit they have a tendency to rely on spreadsheets. It\u2019s a skill they\u2019ve developed over many years; they have become quite adept at plugging in numbers and adding formulas. While spreadsheets are practically regarded as a sacred accounting tool, they cannot be relied on to record revenue accurately every time. They are time-consuming, and leave a lot of room for inaccurate contract interpretations and human calculation errors, especially when managing large, complex spreadsheets. These inaccuracies increase as you attempt to copy, move or embed a worksheet into a spreadsheet.<\/p>\n<p>In addition, serious challenges are likely to arise if an employee is suddenly out of office for a few days or resigns, leaving you in the dark.<\/p>\n<p><strong>2. Non-Automated Software Challenges <\/strong><br \/>\nAccounting departments that utilize nonautomated software must manually maneuver through a complicated maze in order to recognize and defer revenue. In addition to being labor- and time-intensive, it increases the likelihood of contract misinterpretations, multiple data entry errors that occur when transposing or omitting numbers, duplicating information, or misplacing decimals, to name a few. These errors cause major distortions and discrepancies in a host of financial records.<\/p>\n<p><strong>3. Integrating Multiple Accounting Standards <\/strong><br \/>\nA vast majority of companies today have some type of interaction with a global entity, which will require keen insight into foreign currency management.<\/p>\n<p>Accounting departments that rely on non-automated software are now tasked with calculating the impact of foreign currencies on the general ledger; they are required to include both realized and unrealized gains and losses \u2013 per transaction \u2013 all in foreign currency.<\/p>\n<div style=\"text-align: left;\"><strong style=\"color: #1aa1a1; font-size: 25px; line-height: 32px;\"><br \/>\nSolution &#8211; Automation is the Way Forward<\/strong><\/div>\n<div class=\"blog_margin30\"><\/div>\n<p>Fortunately, there is an easier way to maximize revenue management efficiency. With automation, you can support business growth while being operationally efficient and compliant.<\/p>\n<p>Instead of being reactive, the accounting department can leverage automation to take a proactive stance with their revenue intelligence and management solutions.<\/p>\n<p>Contract misinterpretations, repetitive tasks and tedious spreadsheets can be eliminated, along with the need to create a separate revenue recognition schedule for each contract. When you reclaim time, you can devote your attention to other value-added projects.<\/p>\n<div style=\"text-align: left;\"><strong style=\"color: #1aa1a1; font-size: 25px; line-height: 32px;\"><br \/>\nHow Astute can Help you Meet your Performance Obligations<br \/>\n<\/strong><\/div>\n<div class=\"blog_margin30\"><\/div>\n<p>We will start by demystifying the ASC 606 language and translating it into layman\u2019s terms. We have a comprehensive understanding of revenue recognition and will suggest ways to streamline the process so it removes your accounting department\u2019s pain points, and thus, significantly slash their manual work.<\/p>\n<div>By engaging a trusted team of professionals such as Astute, you will have peace of mind knowing these experts will provide compliance support, and help you improve your financial reporting visibility. You can learn more by visiting our <a href=\"https:\/\/www.thinkastute.com\/accounting-tax\/technical-accounting\/revenue-recognition\/\">Revenue Recognition<\/a> webpage.<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Organizations that have already adopted the new revenue recognition standard (ASC 606) may have discovered that it was not a smooth transition. As with any type of change in the&hellip;<\/p>\n","protected":false},"author":1,"featured_media":115,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,11,5,13,14,15],"tags":[43,42],"class_list":["post-113","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-announcements","category-news","category-rd","category-rd-tax-credit","category-small-business","category-startups","tag-asc-606","tag-revenue-recognition"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Automating ASC 606 Revenue Recognition - ThinkAstute Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Automating ASC 606 Revenue Recognition - ThinkAstute Blog\" \/>\n<meta property=\"og:description\" content=\"Organizations that have already adopted the new revenue recognition standard (ASC 606) may have discovered that it was not a smooth transition. As with any type of change in the&hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/\" \/>\n<meta property=\"og:site_name\" content=\"ThinkAstute Blog\" \/>\n<meta property=\"article:published_time\" content=\"2021-08-11T23:44:14+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-25T23:46:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"851\" \/>\n\t<meta property=\"og:image:height\" content=\"315\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Ashwini Vasudeva\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Ashwini Vasudeva\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/\",\"name\":\"Automating ASC 606 Revenue Recognition - ThinkAstute Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg\",\"datePublished\":\"2021-08-11T23:44:14+00:00\",\"dateModified\":\"2023-11-25T23:46:50+00:00\",\"author\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/4dc8d121e3b3b9518f8628592a7ced4a\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#primaryimage\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg\",\"contentUrl\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg\",\"width\":851,\"height\":315},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.thinkastute.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Automating ASC 606 Revenue Recognition\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#website\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/\",\"name\":\"ThinkAstute Blog\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.thinkastute.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/4dc8d121e3b3b9518f8628592a7ced4a\",\"name\":\"Ashwini Vasudeva\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2023\/11\/ashw-96x96.jpg\",\"contentUrl\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2023\/11\/ashw-96x96.jpg\",\"caption\":\"Ashwini Vasudeva\"},\"description\":\"Ashwini Vasudeva, Partner and Co-Founder at Astute, advices clients on Financial stability, Sustained growth and Financial recovery. She assists companies on varies Licensing\/Royalty Compliance Audit, Technical Accounting, R&amp;D Tax Incentive and Forensic Audit related work as well as works closely with clients\u2019 CFOs\/Controllers to develop stronger processes and controls within business. She has more than 15 years of experience in public accounting and various industries. Contact me\",\"sameAs\":[\"https:\/\/www.thinkastute.com\/blog\"],\"url\":\"https:\/\/www.thinkastute.com\/blog\/author\/admin_astute\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Automating ASC 606 Revenue Recognition - ThinkAstute Blog","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/","og_locale":"en_US","og_type":"article","og_title":"Automating ASC 606 Revenue Recognition - ThinkAstute Blog","og_description":"Organizations that have already adopted the new revenue recognition standard (ASC 606) may have discovered that it was not a smooth transition. As with any type of change in the&hellip;","og_url":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/","og_site_name":"ThinkAstute Blog","article_published_time":"2021-08-11T23:44:14+00:00","article_modified_time":"2023-11-25T23:46:50+00:00","og_image":[{"width":851,"height":315,"url":"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg","type":"image\/jpeg"}],"author":"Ashwini Vasudeva","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Ashwini Vasudeva","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/","url":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/","name":"Automating ASC 606 Revenue Recognition - ThinkAstute Blog","isPartOf":{"@id":"https:\/\/www.thinkastute.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#primaryimage"},"image":{"@id":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#primaryimage"},"thumbnailUrl":"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg","datePublished":"2021-08-11T23:44:14+00:00","dateModified":"2023-11-25T23:46:50+00:00","author":{"@id":"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/4dc8d121e3b3b9518f8628592a7ced4a"},"breadcrumb":{"@id":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#primaryimage","url":"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg","contentUrl":"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2021\/08\/44.jpg","width":851,"height":315},{"@type":"BreadcrumbList","@id":"https:\/\/www.thinkastute.com\/blog\/automating-asc-606-revenue-recognition\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.thinkastute.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Automating ASC 606 Revenue Recognition"}]},{"@type":"WebSite","@id":"https:\/\/www.thinkastute.com\/blog\/#website","url":"https:\/\/www.thinkastute.com\/blog\/","name":"ThinkAstute Blog","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.thinkastute.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/4dc8d121e3b3b9518f8628592a7ced4a","name":"Ashwini Vasudeva","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2023\/11\/ashw-96x96.jpg","contentUrl":"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2023\/11\/ashw-96x96.jpg","caption":"Ashwini Vasudeva"},"description":"Ashwini Vasudeva, Partner and Co-Founder at Astute, advices clients on Financial stability, Sustained growth and Financial recovery. She assists companies on varies Licensing\/Royalty Compliance Audit, Technical Accounting, R&amp;D Tax Incentive and Forensic Audit related work as well as works closely with clients\u2019 CFOs\/Controllers to develop stronger processes and controls within business. She has more than 15 years of experience in public accounting and various industries. Contact me","sameAs":["https:\/\/www.thinkastute.com\/blog"],"url":"https:\/\/www.thinkastute.com\/blog\/author\/admin_astute\/"}]}},"_links":{"self":[{"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/posts\/113","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/comments?post=113"}],"version-history":[{"count":3,"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/posts\/113\/revisions"}],"predecessor-version":[{"id":117,"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/posts\/113\/revisions\/117"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/media\/115"}],"wp:attachment":[{"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/media?parent=113"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/categories?post=113"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thinkastute.com\/blog\/wp-json\/wp\/v2\/tags?post=113"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}