Procure to pay, order to cash, record to report, controllership processes, finance transformation. Do these sound familiar? And do these processes involve predictable manual work, as well as large data to be processed and collected? As the answer is likely to be yes to both these questions, you are probably aware of the headaches they produce. As for the solution? Robotic Process Automation (RPA) is estimated to have a global potential of 44% in Finance and Accounting. With proven results for many front runner companies, RPA is guaranteed to smoothen the way business operations are managed.
BTerrell Group Blog
Back in April of 2010, the Financial Accounting Standards Board published new accounting guidance for calculating an often challenging method for recognizing payments on certain forms of revenue. Published as “ASU 2010-17: Revenue Recognition – Milestone Method (Topic 605)”, and discussed in draft abstract form in “EITF 08-9: Milestone Method of Revenue Recognition” on RevenueRecognition.com, the method allows vendors to recognize revenue at the time that a contractual obligation has been fulfilled, instead of applying revenues systematically throughout the term of the contract. However, because of the complexity of dealing with contractual incentives, such as bonuses, the milestone method outlines a few criteria that must be met.
One of the key points in this methodology is that a milestone must be an event for which there could be ‘substantive’ uncertainty for achieving this event at the time of contract signing. Although ‘substantive’ is a key word in this process, it still involves a matter of judgement considering either the vendor’s performance to achieve the milestone or the added value of the delivered item or service resulting from the achievement of the milestone. Most businesses may have some projects that may fit into this method of revenue recognition, and others that don’t. As such, an agile financial management solution that can manage variable revenue recognition models can help clarify and streamline these efforts. Contact BTerrell Group for more guidance with identifying and managing varying revenue recognition models. And, if you are concerned about the transition year difficulties imposed byASC 606 – Revenue from Contracts With Customers, we can help you get ahead of the game there, as well!
Robotic process automation (RPA) has the potential to to create major improvements in cost, quality, productivity, and speed of business operations, according to a recent report from The Hackett Group.
The technology—which analysts began studying about five years ago—offers the ability to deploy quickly, with reduced dependency on IT for implementation and support, according to the report. Some vendors have claimed to use RPA to deliver as much as 60-80% in savings. The automation technology can also reduce errors common in human-performed work, and allow companies to refocus their human talent on higher-value tasks, the report noted.
ShipMonk, an ecommerce fulfilment provider, is no stranger to robotics and automation. It uses these technologies to reduce its picking and packing times and to drive revenues, CEO Jan Bednar said. The company is also no stranger to soothing employee fears about job losses due to the introduction of these technologies.
When ShipMonk deployed a robotics process automation application, “I told my employees that they would have nothing to fear due to automation for two reasons," Bednar said. "First, we have an environment that is very conducive to continued education. Employees who were interested in receiving training in the maintenance and operation of these robotics could absolutely receive it.” Second, he said: “I was very transparent with them that our investment in robotics would mean more growth and less hires — but not job cuts.”
Like many accounting and financial technology professionals, I am busy getting up to speed on best implementation practices for ASC 606, Revenue from Contracts with Customers. ASC 606 takes full effect for both public and private companies within the next several years, and applying the new guidance won’t easily happen without adequate planning and effort. Here are highlights to consider thus far.
First, adoption will not be trivial: ASC 606 replaces scores of individual provisions in existing GAAP, and the cost of delaying implementation or trying to correct mistakes later could get scary. Start now, identify crucial differences between existing GAAP and the new guidance, designate an implementation champion, develop a project plan and educate key stakeholders.