Leveraging Salesforce for Revenue Recognition Standards
Do your existing systems have built-in Rev Rec tools?
If you are on Salesforce, the answer is yes.
The long-heralded arrival of ASC 606, “Revenue from Contracts with Customers” is prompting many companies to reassess how they frame sales contracts. We believe that with proper contract categorization and grouping, attention to performance obligations and sound management judgments and documentation, companies can successfully implement the new standard well ahead of schedule.
Where do you start? One consideration is to assess your current tools and technology to determine how they can be leveraged. For example, if your company utilizes the Salesforce platform, this is a great place to start.
Leveraging Salesforce to Comply with New Revenue Recognition Standards
For companies that use the Salesforce platform, there are some great features to leverage that support the new revenue recognition requirements.
- If configured correctly, Salesforce can help to easily identify separate performance obligations of each contract, then allocate the transaction prices respectively. This is a huge benefit over doing this in a spreadsheet, etc.
- ASC 606 requires that pricing allocations be based on standalone selling prices, and discounts must be applied using a standard methodology. With Salesforce, these rules can be configured to assign transaction prices to each separate performance allocation.
- Once your company has defined distinct goods and services as defined by ASC 606, they should become required fields for entry when an opportunity is closed in Salesforce. Better yet, the fields can even be required when opportunities are first entered for forecasting purposes.
How should Salesforce be configured to drive adoption?
Many companies struggle with adoption or data quality in Salesforce. Some have outgrown the contract elements originally set up for their sales team’s input.
Here are some quick tips to optimize results:
- Make certain fields required
- Standardize input through drop-down lists
- Eliminate extraneous fields and prioritize the layout of the interface, examining what fields are not being used consistently
- Drive adoption through training and a rewards system
Need outside help? Have other ASC 606 concerns?
Enlisting a Salesforce consultant from Bridgepoint Consulting can help set your organization up for success. We offer implementation, optimization, and customization solutions using Salesforce and Force.com. Contact us today! You can also sign up for our free one-day Salesforce Health Check. Our experts will spend the day with you reviewing your system and providing recommendations in one key area to support process improvement and optimization.
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