Do you feel like your software company is being held back by compliance standards? Is it hard to keep up with the changes of the SaaS industry?
We understand that maintaining compliance can be stressful and is an ongoing challenge. That’s why we use Sage Intacct, an intelligent financial management software, to simplify and automate the revenue recognition process for our clients.
The New Standard: ASC 606
ASC 606 is the new standard for recognizing revenue. Under this standard, revenue is recognized as soon as the contractual obligation is met, rather than when you receive payment.
The ASC 606 standard aims to provide a framework to standardize the way financial reporting is done across industries. It breaks down the process for recognizing revenue more effectively into five steps. The 5-step process for SaaS companies includes the following:
How to Recognize Revenue for SaaS Companies
- Identify the contract with a customer.
- Identify the performance obligation set forth in the contract.
- Determine the transaction price.
- Allocate the transaction price to performance obligations.
- Recognize your revenue.
Revenue Recognition Made Simple
Using a dedicated cloud software for tracking and managing your revenue recognition will help your business take the next step toward growth. A good software provider will help you simplify the process, keeping you compliant with ASC 606, and help you evolve to meet your customer demands.
There are a few key things you should look for in your software provider’s capabilities. Your accounting system must:
- Be able to automate the revenue recognition process, simplifying tasks and reporting.
- Connect billing and revenue recognition in real-time for a streamlined system.
- Enable compliance with dual reporting to gain immediate visibility into how changes are affecting your financials.
- Integrate with Salesforce and contract processes to save time and reduce manual errors.
- Provide increased visibility and relevant insights through reporting for your key stakeholders.
- Keep your data centralized and easy to manage with true multi-tenant cloud architecture.
When you partner with an outsourced accounting firm, you’ll gain the knowledge and guidance of an experienced team of accounting professionals. They will help you implement an accounting software that is right for your business, making revenue recognition easy and helping you get more value from your accounting solution.
Get ASC 606 Accounting Help From Lescault and Walderman
As software accounting specialists, our knowledge of the industry can help you select and implement the software you need to efficiently manage your business financials. We can provide guidance on best practices using Sage Intacct’s world-class software, keeping you compliant and prepared for your next contract. Contact us to schedule an introductory call and learn more about how we can help manage your fiancial processes.