NetSuite ASC 606 – Many of the companies are stuck in fixed revenue for years and don’t come up with any solutions for many cycles or quarters of a trading year. It is because their organization isn’t flexible, has more complexity, insufficient work access, etc.
NetSuite’s recent development of revenue can be helpful for you if you are running a company that is stuck with its income.
How NetSuite ASC 606 helps your company’s revenue?
The main ideology of this new revenue recognition standard is that it standardizes the revenue recognition procedure for both public and private businesses and companies, which is inconsistent with complexity in today’s economy. Some experts also say that NetSuite ASC 606 will impact any business which can count on the revenue. ASC 606 NetSuite is a subscription-based product that is useful for your company.
How will NetSuite ASC 606 impact your company?
ASC 606 NetSuite will have a different impact on different types of industries. it will impact on the finance and IT teams of your firm. The assessment has to be given for the platform of finance, software, and systems to check their ability to precisely take into account all the permutations of your company’s revenue. The team of finance in your organization should buckle up the existing procedures and the system to ensure good compliance.
For bigger companies, this will be a problem on a large scale as most of their financial systems are not that flexible and moreover they are very difficult to modify because of implementation, that has been done ages ago.
ASC 606 NetSuite Compliance
NetSuite is the company that is an expert in any kind of ERP and Financial solutions and won several awards for it. It is always ready to assist with NetSuite ASC 606 needs. The relevant and basic characteristics include:
- Strong reporting capabilities
- Flexible system
- Ability to run parallel books
How to manage ASC 606 via NetSuite?
Step 1 – Identify the contract or deal with a consumer
A contract has to be established between the company and the customer. NetSuite 606 ASC has some guidance on how to manage any contracts. From the perspective of ERP, these contracts will start once a quotation or sales order has been placed in the system.
Step 2 – Performance obligations should be identified in the contract
There are some considerations for these requirements which need to be looked for like performance obligations and these need to be identified before finalizing the contract.
Step 3 – Set the transaction price
It is obvious and important to realize that the price has to be set adequately and effectively to make the deal more impactful. The organization should also take note of the work to profit ratio before finalizing the transaction price.
Step 4– Divide the transaction price according to the performance obligations present in the contract
There are some complications to this business process. NetSuite offers a good feature of grouping the items into categories and also to divide the correct transaction price to its obligation from the contract, ASC 606 NetSuite is used as it is an effective tool.
Step 5– Recognize revenue when the performance obligation is satisfied.
This is one of the many challenging criterias for many companies and for ERP systems. The revenue of the deal is recognized when the sales invoice is uploaded in the ERP systems. The recognition of the revenue has to be done after the satisfaction of the performance obligation. It needs more flexibility and optimization and these features can be obtained in ASC 606 NetSuite .
NetSuite has always been committed to customer satisfaction. And its tool of ASC 606 NetSuite can be very helpful to overcome the revenue and financial crisis for many companies. It is only possible if they understand, install, and use the NetSuite ASC 606 effectively. If your company is not ready then it is required to start the process to change your long-term procedure. The ASC 606 NetSuite will simplify your work significantly.
We at SuiteActive work with clients to assistance during and following their NetSuite ERP Consultant.