CFOs eschew spreadsheets in favour of specialist Revenue Recognition software

21st April 2016

A survey released today suggest that CFOs and senior management teams are reassessing their revenue management practices and technology in response to shifting market conditions that demand new billing models.  According to “The New World of Revenue Management” report companies will look to implement purpose-built applications for revenue recognition rather than spreadsheets which cannot cope with the complexity. 





According to the report issued jointly by the Institute of Management Accountants (IMA) and FinancialForce, a leading cloud ERP provider two concurrent market shifts are occurring that demand companies to implement revenue recognition procedures capable of addressing more complex scenarios.

First, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued new revenue recognition accounting standards, update No. 2014-09 and IFRS 15 respectively. Second, a new category of usage-based business models are drawing attention for their ability to positively influence a business’s valuation. This includes software subscriptions, recurring billing, professional services and product/service bundling. These increasingly-popular business models encourage revenue growth, but require new billing and revenue recognition procedures to accurately track what can be recognized and when - tasks better served by technology beyond spreadsheets.

According to Gary Simon, Chief Executive of FSN and Leader of the Modern Finance Forum on Linkedin, the report illustrates how innovative cloud-based applications are increasingly filling the void between legacy ERP solutions and spreadsheets. “It’s fascinating that the digital economy is responsible both for the shift to new revenue models and the accounting solutions needed to support them,” he says.

The report warns that companies that do not fully grasp the requirements for revenue recognition are at risk of non-compliance. 30 percent of respondents recognize that new revenue recognition standards will impact their company somewhat or a great deal.  Of those that categorize themselves as “very satisfied” with their revenue management systems, the majority are using ERP systems to track revenue recognition, says the survey.

“We are in the midst of the as-a-service economy boom, which is making recurring revenue the central model of new and traditional businesses. CFOs and senior management teams are at a crossroads and must address these major shifts or risk being non-compliant, inefficient, and worse yet, lose market share for failing to give customers the new billing models they want,” said Raphael Bres, General Manager for Financial Management applications at FinancialForce. “As this survey underlines with the upcoming new revenue recognition rules, it is time to adopt a strong Revenue Management application, with customer retention in mind, helping companies to gain a reliable and predictable revenue stream, superior customer and revenue forecasting analytics, as well as automating complex accounting requirements.”

FinancialForce and IMA partnered to create this report, surveying 6,000 accountants and financial professionals across the globe. Download the report at