Automating revenue recognition is the best practice to ensure accurate, reliable and timely revenue reporting. If a company’s business model includes a high volume of transactions and/or any combination of subscription, usage or volume-based measures, then automating this process is not only a best practice, it is essential.
Unique to goTransverse is the industry’s first native subledger that easily applies complex revenue recognition policies specific to your company, including guidance associated with US GAAP and IFRS and also provides the flexibility to quickly address the changes in those policies and guidance. This native platform capability applies complex and dynamic charging/billing scenarios and recognize revenue as desired. Having revenue recognition native to the platform and the ability to trace revenue recognition to specific accounts receivable events means better future forecasting, cleaner audit trails and faster times to close the books, especially for consumption-based offerings.
The native revenue recognition capabilities in the goTransverse platform can do the following:
- Manage revenue recognition on a daily or periodic basis taking into consideration various factors including but not limited to: service period, agreement length, customer lifetime metrics and milestones
- Full allocation of agreement considerations across multiple units of accounting for every sale and/or order specific to your company’s revenue recognition policy
- Easily track transaction level, summary level or segmented journal entries
- Automate revenue recognition for multiple element arrangements in alignment with the current and future revenue recognition guidance
- Redistribute revenue changes in the subscription lifecycle (e.g., add-on, upgrade, downgrade, cancel)
- Define revenue recognition logic to invoke at time of service deactivation
- Apply deferrals, triggering events, revenue catch up and contract allocations across multiple elements per your company’s revenue recognition criteria
- Recognize revenue and conversions for transactions conducted in foreign currencies
- Pause, resume, modify or cancel revenue recognition schedules already in progress
- Post to General Ledger accounts based upon several different criteria, such as currency, account type, and product category
- Support multiple General Ledgers as well as multiple ERP solutions
Complying with ASC 606
goTransverse’s ASC 606 functionality enhances the native revenue recognition capabilities of the goTransverse platform. We ensure revenue recognition that is processed through the goTransverse platform is in compliance with the new standards, while also giving the user total control over the inputs so that revenue recognition is calculated in a way that is best for their organization.
goTransverse’s ASC 606 functionality:
- Handles the complexities of deferred revenue and multi-element arrangements
- Allocates revenue to performance obligations based on the relative value of Standalone Selling Prices
- Recognizes allocated revenue as products and services are delivered, or as otherwise defined
- Allows for estimates of quantity-based products/services
- Provides the ability to override automated values such as revenue recognition dates, Standalone Selling Price, allocated Transaction Price
- Allows for multiple general ledgers to make it easier to comply with financial statement disclosure requirements
- Allows for contract modifications to handle mid-term changes, revisions of estimates and other contract terms. goTransverse’s native General Ledger will automatically process modification journal entries based on the type of modification chosen
- Includes the ability to add Variable Consideration to manage:
- Allocation of contract value to non-monetary contact elements such as future contract rights and warranty obligations
- Allocation of contract value to estimated contingent events
- Ability to add future-billing-based elements such as early payment discounts and performance bonuses
- Provides clarity into your present and future revenue performance with waterfall reports
Looking to achieve full ASC 606 compliance? Speak to a goTransverse billing expert today to learn more about goTransverse’s ASC 606 solution.