Revenue recognition rules might go down as one of the most “accounting-iest” concepts out there. You’re telling me that after a customer pays money for something just sold, specific rules need to be followed to record that revenue correctly in the financial statements? Well, if you report your financial statements on an accrual basis (and […]
Many startup founders we’ve spoken to at ProRata started out (or are currently) tracking revenue in a cash-basis. They soon realize the value in switching to an accrual-based revenue model.
In a recent study by the APQC found that finance workers spend 50% of their time doing transaction processing. That’s half of their day! Here are the results of the study and what executives would rather their finance staffs be doing.
If you are similar to a lot of software companies who need to track deferred revenue, you’ve probably at some point created a complex spreadsheet to aid in the process. Here are some signs that you have outgrown your Excel spreadsheet for tracking revenue recognition.
The FASB has released an accounting standards update (ASU 606) titled “Revenue from Contracts with Customers (Topic 606)” which outlines how software companies should recognize revenue. Here are the 5 steps.
What is Deferred Revenue? Deferred revenue is revenue you have received payment for but can not be realized. Think of it as pre-payment for goods or services that a company is expected to provide to the purchaser at a later time. Deferred revenue is also called unearned revenue because, as the name states, it has not […]
In May of 2014 the FASB and IASB issued a press release offering joint recommendations regarding revenue recognition (link to press release). This recommendation is especially important for software companies when dealing with customer contracts. Until this guidance was available there was no agreed upon standard between GAAP and IFRS standards. Why is revenue recognition […]