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SAN JOSE, Calif. – May 10, 2016 – Intacct, a leading provider of best-in-class cloud ERP software, today announced the launch of Intacct Contract and Revenue Management. The new offering marks the industry’s first automated solution to help companies navigate the complexities created by the upcoming ASC 606 and IFRS 15 revenue recognition guidelines, which otherwise could burden and overwhelm finance teams with the most sweeping accounting changes in over a decade.
Intacct Contract and Revenue Management is a new module for Intacct’s cloud ERP solution that fully addresses all the upcoming rules for revenue reallocation and expense amortization—using automation, not spreadsheets and a lot of accountants’ time. This comprehensive solution provides out-of-the-box functionality that reduces dependence on IT resources and doesn’t require complicated scripting.
Starting in 2018 for public companies and 2019 for private companies, ASC 606 and IFRS 15 revenue management guidelines from the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) will require companies to identify performance obligations in existing contracts, reallocate revenue each time a customer contract changes, and defer expense recognition to align with the contract’s delivery. As a result, contract add-ons and renewals must be integrated into a single contract and will trigger reallocations across both past and future periods—causing continuous revisions to revenue allocations and expense alignment.
Although the new accounting standards go into effect in 2018 and 2019, the influence of the new guidelines will impact companies much earlier, as any customer contract that extends beyond the start date will be effected. For example, a public company using two-year contracts would be impacted immediately. Furthermore, most companies will need to recast prior-period financial statements using the new guidelines in advance of the start date in order to provide proper comparative and future guidance to investors.
In a recent Intacct survey of 320 finance executives at mid-sized companies, less than 10 percent of respondents had started to take the necessary steps to address the new standards. In addition, nearly half (47%) said that implementing the new requirements into their financial system or revenue recognition spreadsheets would be their biggest challenge to addressing the new rules.
“Companies affected by the new rules will find that conforming to them will be a major undertaking,” said Robert Kugel, SVP & Research Director at Ventana Research, a leading benchmark research and advisory services firm. “These changes necessitate an extensive review of contracting and accounting policies and processes, and will likely require changes to procedures and—above all—systems. Companies with even moderately complex customer contracts are going to find that the new rules will have extensive impacts best dealt with by software designed specifically to handle the new requirements. Using spreadsheets to manage revenue recognition is not an option, because the complexity of the new standards will add substantially to their accounting staff workloads and increase the probability of errors and misstatements.”
Intacct Contract and Revenue Management is designed to make companies audit-ready, while delivering the continuous insights needed to make their financial future predictable. The new software enables companies to simultaneously manage revenue using both the current and new accounting guidelines—allowing them to operate under current guidelines and the new standards, simultaneously.
For joint Intacct and Salesforce customers, Intacct Contract and Revenue Management also enables companies to structure workflows to capture and edit contracts natively in Salesforce. There is no need to import contracts using additional integration software or by rekeying them into Intacct—streamlining processes and eliminating potential errors.
“Our focus on finance enables Intacct to move faster than our competitors and deliver a more comprehensive solution to manage the impending changes to the revenue recognition guidelines,” said Dan Miller, VP of Product Management for Intacct. “It will be near impossible to do all of the revenue reallocation manually due to the sheer volume of contracts and adjustments that will be required for subscription-based businesses. With Intacct Contract and Revenue Management, companies will be able to easily and seamlessly manage their transition to the new accounting standards without using complex work-arounds, bolt-on solution, scripting that may break over time, or hiring a significant amount of additional accountants.”
To watch a video overview of Intacct Contract and Revenue Management, please visit https://www.intacct.com/videos/intacct-contract-and-revenue-management.
Intacct Contract and Revenue Management will be generally available starting May 20 from Intacct and its network of channel partners as part of Intacct 2016 Release 2.
Intacct is the innovation and customer satisfaction leader in cloud ERP software. Bringing cloud computing to finance and accounting, Intacct’s innovative and award-winning applications are the preferred financial applications for AICPA business solutions. In use by organizations from startups to public companies, Intacct is designed to improve company performance and make finance more productive. Hundreds of leading CPA firms and Value Added Resellers also offer Intacct to their clients. The Intacct system includes accounting, cash management, purchasing, vendor management, financial consolidation, revenue recognition, subscription billing, contract management, project accounting, fund accounting, inventory management, and financial reporting applications, all delivered over the Internet via cloud computing.