How to rise to the rev rec challenge

Accounting for revenue is no piece of cake, and it’s especially true for a lot of Silicon Valley firms. If your rev rec won’t stand up in an audit, you’ve got your work cut out for you.

RoseRyan guru Miranda Chook has seen her share of rev rec fiascos. “Firms with complicated multiple-element agreements can really get tripped up,” she says. “They don’t have or haven’t consistently applied the proper accounting treatment for their various revenue streams. After awhile, they’re really in the weeds. They’ve closed a lot of deals, but they’ve documented them in incorrect ways. Now the audit needs to happen. Panic!

“What companies need is an auditor-approved treatment that covers all revenue types. Then they need to go back and apply industry-specific GAAP literature to deals. Once the accounts are clean, they need a template going forward so they don’t get in the weeds again.”

If rev rec is the bane of your existence (or just a nagging worry), rest easy—it’s one of the things we live for. Find out how we helped one high tech firm rectify its revenue accounting and come through an audit with clean books and a user-friendly rev rec template.

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New report: Summit your audit mountain with peak-performance audit prep

We’ve seen audit delays wreak havoc on implementation of business plans and make financing a costly affair. Why? Companies failed to undertake a pre-audit review to pinpoint problems and make recommendations for solving them, as well as improve efficiency and implement best practices. Once they initiated audits, they failed to collaborate with their auditor to make the process efficient and keep its costs in check.

It doesn’t have to be that way. Our new report, Audit Time? Don’t Sweat It by RoseRyan guru Julie Gilson, will help you speed up your audit summit and plant a clean flag. Its audit preparedness tips will help you work with your in-house audit team and audit firm to address technical accounting issues and missing or messy documentation that could waylay your audit.

Tip #1: Find out how knowledgeable you are about your company’s accounting. Our report asks three questions that will help you figure out whether you need to start talking with your audit firm to vet issues that could cause audit adjustments.

A pre-audit review, followed by audit prep, is key to a timely and cost-effective audit. Check out our report and breathe easy knowing that your audit is no obstacle to your business plans.

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