Significant Impact on Software and High-Tech Companies
As we quickly approach the second half of the year and the length of our to-do lists seems to increase daily, the need to prepare for the upcoming changes in accounting is more important than ever. In the Software and High-Tech industries, however, preparation for ASC 606 might be even more relevant.
According to NetSuite’s white paper, Countdown to ASC 606, “… the implications of the new guidelines go well beyond a few adjustments to accounting practices and processes—it demands a comprehensive overhaul across all aspects of the business—finance, sales, operations, services and IT—that requires a tremendous amount of planning.”
So, what are the main actions that software and high-tech organizations should be taking in order to prepare?
Preparation in Software and High-Tech
In addition to new regulations and new reporting requirements, the ASC 606 will affect software and high tech companies through the elimination of industry-specific guidelines, such as:
- Vendor-Specific Objective Evidence (VSOE)
- Third Party Evidence (TPE)
- Best Estimate of Selling Price (BESP)
As InnoVergent CEO Paul Cammisa wrote in one of our latest articles, “adjusting to these changes will require extra work from all departments, demanding preparation and consistency across the organization.”
According to NetSuite’s white paper, now is the time for businesses to begin preparing for this significant change. “It’s important to discover your current state, identify the gaps and then get alignment internally with finance, sales operations, legal and IT,” they explain.
To learn more about the major work efforts required in order to prepare for ASC 606, download the white paper, “Countdown to ASC 606: What every business needs to know about the new revenue recognition standard.”
As your company navigates through the opportunities and challenges that the new standard will present, make sure to contact us and find out how InnoVergent can help you prepare.
