Beginning December 15, 2017, the Financial Accounting Standards Board (FASB) will enforce a new rule that changes how organizations report revenue.
FASB imposed the new accounting rules in order to more accurately reflect revenue on financial statements, making it easier for investors to compare revenue bookings between companies. And while this may sound like a project for the CFO and accounting team, many large firms are engaging IT departments to revamp their software and systems.
According to a recent Ernst & Young survey of several hundred technology and finance professionals, a large percentage of organizations are unsure if they will be able to complete the upgrades before the end of the year – forcing teams to use manual workarounds until new systems can be implemented.
“Companies are finding it is very difficult to translate accounting rules from the new standard into usable business requirements,” said John McGaw, a partner with Ernst & Young.
For many organizations, the implications, resource requirements, and administrative costs are unclear. Ernst & Young’s survey estimates large firms could take up to six months to fully retool their systems – not taking into account the audit work necessary to restate the past two years of financial statements.
While the commitment to technology upgrades can seem overwhelming, there are automation systems available in the marketplace that are affordable and easy to implement, like SkyStem’s ART.
To learn more about how you can achieve a streamlined financial close, while providing greater internal controls for your team, schedule a demo of ART today.