Automation is nothing new to accountants. At least since the advent of the adding machine financial professionals have been using intelligent tools to work more effectively. What is now different is that automation has become essential rather than merely beneficial.
The new revenue recognition rules mandated by AS6 606 recently went into effect for public companies and will soon go into effect for private ones. The details of these rules are familiar to everyone by now. And, unfortunately, so are the complexities, complications, and consequences.
ASC606 is the most sweeping set of changes to impact accounting in a decade. The law requires accounting departments to take on huge new volumes of work, meet the new standard for accuracy, and act within very narrow timelines. That puts accountants in a difficult position – adopt drastic new ways of doing things or else be in breach of the law.
In response, accounting departments are increasingly identifying automation as a mission-critical tool that is uniquely able to make regulatory compliance accessible and reliable. More than any other solution, automation is getting companies over the hump in regards to ASC606. Here are a few examples of how:
Keeping Costs in Check
Trying to accommodate new revenue recognition rules using manual processes would require adding an army of new accountants to the ranks. Automation that is calibrated for ASC 606 is able to handle the same volume of work in less time and with far less human input. Companies are able to adapt to the new regulations without having to transform the current makeup of their accounting department.
Accelerating Time to Close
The extra work created by ASC606 places a significant stress on existing accounting resources. At exactly the time when accounting departments are trying to work faster in order to gain a strategic advantage, new rules slow the pace down to a trickle. Automation allows these departments to accommodate larger workflows while dedicating more of their individual time to productive or strategic initiatives. Adapting to ASC 606 actually maximizes the potential of accounting departments.
Eliminating Errors and Omissions
Companies that attempt to comply with ASC606 using manual processes must contend with more mistakes as a result. That means both compliance and the integrity of the ledger are put at risk. Automation has just the opposite effect. Larger amounts of work are completed with greater consistency and accuracy. In that way, ASC 606 does exactly what it intends to do – improves the quality of accounting overall.
It’s possible to forego automation and still comply with ASC606. But the burden is astronomical, and the simple act of keeping pace causes companies to fall behind. Automation is the solution that makes implementing, optimizing, and utilizing a solution easy.
But don’t just settle for any automation. Rely on the very first solution designed specifically for ASC 606 – Sage Intacct, the tool that makes compliance convenient. No matter how prepared you are for ASC 606, Sage Intacct can improve the process. Contact InCloud360 to learn more.