Aptitude Software https://www.aptitudesoftware.com/ Automation and Transformation Enterprise Software Solutions Sat, 09 Jan 2021 15:05:48 +0000 en-US hourly 1 IFRS 17 Roadshow: Greetings from London! https://www.aptitudesoftware.com/ifrs-17-roadshow-greetings-from-london/ Wed, 02 May 2018 19:49:15 +0000 https://www.aptitudesoftware.com/?p=7306
The Power of Combined Minds Like our previous roadshow events in Toronto & NYC, we welcomed a mix of finance leaders, accountants, actuaries, and advisors to discuss IFRS projects and considerations. At Grange St. Paul’s hotel, Aptitude Software IFRS 17 Experts, Linda Bembridge and Chris Roberts presented to a packed room of insurers and partners, including two […]
 

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The Power of Combined Minds

Like our previous roadshow events in Toronto & NYC, we welcomed a mix of finance leaders, accountants, actuaries, and advisors to discuss IFRS projects and considerations.

At Grange St. Paul’s hotel, Aptitude Software IFRS 17 Experts, Linda Bembridge and Chris Roberts presented to a packed room of insurers and partners, including two members of the IFRS 17 Transition Resource Group and some of the leading advisors in the market. 


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Lloyd’s of London, RSA, SwissRE Insurance, MS Amlin and others listened attentively as Linda spoke about the accounting considerations of IFRS 17 and the learnings coming out of our current client projects and POCs.  Chris walked the audience through a demo of our IFRS 17 solution.

During the networking session and breaks, attendees compared notes on IFRS 17 progress (most seem to have completed their research phase and were now looking to start doing proof of concepts) and discussed the accounting and resourcing challenges that seem to be surfacing.

Key Takeaways

The conversation was varied but as we wanted to highlight a few top takeaways that stood out from the event discussions.

While compliance may be the initial (and worthy!) goal, it can be a first step on a longer journey.

We are hearing from many insurers that while they want to use IFRS 17 to make improvements to their finance architecture, compliance feels like enough of an effort for right now. We understand and support this but we believe there is a way to define your IFRS 17 project and solution that will allow you to achieve compliance within the deadline and then slowly move to compliance with control & substantiation on to compliance with control, substantiation & flexibility and finally to full finance transformation.

Project resourcing is a significant aspect of IFRS 17

Staffing IFRS 17 projects was a topic that came up frequently – often followed by the phrase “our staff is flat out!”  Insurers are exiting their impact assessment phases and beginning to think about and plan how the implementation will actually happen. And like any large-scale effort, the devil is in the details. IFRS 17 will require hiring the right number of people as well as people with the depth of actuarial and accounting experience required.  One attendee talked about trying to kick off their project as soon as possible to avoid skills shortages in the market.  

Final Thoughts

Two of the most prevalent sentiments that our team heard during the networking were that attendees know there is a lot about IFRS 17 they don’t understand and that they want to see a real, genuine product solution to IFRS 17 complexities, not just another promise.

We’re looking forward to helping clients through the IFRS 17 change process.  For more material, market perspectives and upcoming roadshow event details, please visit the IFRS 17 Resources page.

 

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IFRS 17 Insights, Thoughts and Concerns from the Road https://www.aptitudesoftware.com/ifrs-17-insightsthoughtsandconcernsfromtheroad/ Fri, 13 Apr 2018 17:56:07 +0000 https://www.aptitudesoftware.com/?p=7107
The Power of Combined Minds Our theme of ‘The Power of Combined Minds’ was definitely evident in this week’s IFRS 17 Roadshow Events in Toronto and New York City.  Finance, IT and Actuarial leaders from many global insurers listened intently to the discussion which included topics like IFRS 17 operational accounting challenges, system considerations and […]
 

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The Power of Combined Minds

Our theme of ‘The Power of Combined Minds’ was definitely evident in this week’s IFRS 17 Roadshow Events in Toronto and New York City.  Finance, IT and Actuarial leaders from many global insurers listened intently to the discussion which included topics like IFRS 17 operational accounting challenges, system considerations and insights from 2 current Aptitude Software IFRS 17 projects.  Attendees also received a demo of the Aptitude IFRS 17 solution and had the chance to network with one another.

The questions and concerns that came up touched on many different aspects of compliance.  Questions like:

  • How do we select the right model if we don’t know exactly what our business will look like?
  • How do we handle reporting across many different divisions?
  • Can we summarize all data coming out of the actuarial systems at the group level and how often do we have to run the models?
  • How often do we have to run our actuarial models?

Key Takeaways


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The conversation was certainly far reaching but we wanted to highlight three of the top takeaways that stood out from the event discussions.

Start from where you need to end up.

Rather than starting your process by looking at all the data and all the systems you have and may need, Head of Finance Advisory at Aptitude Software, Linda Bembridge encouraged attendees to start their impact assessments by looking at exactly what will be required for the disclosure requirements – and then working back from there.

Flexibility in any solution will be critical.

Three years ago we were helping some of the world’s largest telcos navigate the beginning stages of IFRS 15 / ASC 606 compliance.  As we look back on those early discussions around reach compliance, it is evident just how much telco business models have shifted over that time – and required their revenue recognition solutions to change as well. Insurers are in a similar position today. They are grappling with assembling their contracts and understanding what models will best serve their business.  Even the standard itself is still evolving.  The more flexibility you can maintain in your solution approach, the better.

Think grouping at a high level, accounting at a low level

Linda spoke about the value of grouping contracts at a reasonably high level in order to get the value of offsetting contracts that are going onerous versus those that are not so that they naturally hedge each other.  While this grouping which is determining your accounting policy can be kept at a high level, the underlying accounting can be done at the most granular level. This way you get the value of better finance data for management insights and a better audit trail for IFRS 17 disclosure reporting.

Final Thoughts

The mood at the events was focused but positive.  One attendee said that they could see the future value in compliance, and that Finance is embracing the challenge rather than fearing it.  They saw it as “massively career defining.”

We’re looking forward to helping clients through the IFRS 17 change process.  For more material, market perspectives and upcoming roadshow event details, please visit the IFRS 17 Resources page.

 

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Your Rev Rec Community. Your Rev Rec Future. Aptitude RevStream’s User Conference. https://www.aptitudesoftware.com/your-rev-rec-community-your-rev-rec-future-aptitude-revstreams-user-conference/ Tue, 10 Apr 2018 20:20:13 +0000 https://www.aptitudesoftware.com/?p=7065
What is new at RevConnect this year? Aside from the global Aptitude Software team joining us for their first RevConnect experience, an exciting aspect to this year’s line-up of activities is our new training capabilities. Only at RevConnect on May 16 can users receive our new bootcamp style training. RevConnect brings the finance world together […]
 

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What is new at RevConnect this year? Aside from the global Aptitude Software team joining us for their first RevConnect experience, an exciting aspect to this year’s line-up of activities is our new training capabilities. Only at RevConnect on May 16 can users receive our new bootcamp style training.
RevConnect brings the finance world together to talk about what we live and breathe – Contract to Revenue Management!
Speakers will share their lessons learned from ASC 606 implementation (compliance and software) to thoughts on ways to modernize and use newly accessible data. Revenue management is not just an accounting function but a powerful business tool. For public companies who have begun reporting under ASC 606 and IFRS 15, we will discuss what’s next. For private companies, this is a great opportunity to learn from those who have taken the steps you are about to take.

What does life beyond ASC 606 look like?

In the words of Rajiv Chopra – RevStream founder, and now Aptitude Software CRO:

“I think the key message here is that 606 is a pretty massive global accounting change for companies, and they had to expend a lot of resources to get compliant. It will take some time for things to settle down. But then we need to look beyond compliance. Rev rec software tools like RevStream do a lot more than just compliance. You can really ingrain the data output as part of the revenue business operation…now that you can see all of your contracts and everything that’s been sold in a certain way – you have everything all together in one place. Now it’s time to start thinking a little bit more about the business process and operations optimization angle. Right now, there’s no other crazy compliance checkbox coming in, so let’s see what we can do better.”

What is new at RevConnect this year?


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Aside from the global Aptitude Software team joining us for their first RevConnect experience, an exciting aspect to this year’s line-up of activities is our new training capabilities. Only at RevConnect on May 16 can users receive our new bootcamp style training. We are taking our new multi-day training offering and compacting it into a one-day, intensive, hands-on training session with the MVPs of RevStream training. Definitely bring your own laptop as this is truly hands-on training. The cost and time savings for this one day alone is well worth the $995 registration – plus you will receive 8 CPE credits.

 

A word of warning – users must have experience with RevStream software, this training will take you beyond the basics to truly utilize the power of Contract to Revenue Management.

 

Who is speaking?

Our customers and partners are our greatest advocates and resources for innovation, process improvement, and of course, stories about the time they used to spend poring over spreadsheets for days on end! The insights gained from focused community discussion on issues that matter to you are extremely valuable to personal career development, as well as to your company and department. The 8 CPE credits we are able to offer for full conference attendance is a nice bonus.

 

Join us on May 17 at the RevConnect conference to hear:

  • Aptitude Software CEO and CRO – Tom Crawford and Rajiv Chopra on stage together to discuss the future power of the combined companies. Plus they will share their thoughts on the modern CFO office and the new pivot to ‘contract as king’.
  • VMware, a global SAAS company – transformed their businesses using the finance office as the catalyst and managers of change.
  • Ciena, a telecommunication and network company – faced compliance and a home grown system replacement. This became a buy vs build discussion as well as a finance discovery project.
  • KPMG – based on their vast implementation experience, KPMG will discuss remodeling processes and managing change.
  • Deloitte – their collection of global firms provides insightful data from which trends in digital disruption are identified and projected. Deloitte will discuss just where the finance office fits in the modern enterprise ecosystem and how to best leverage the CFO position.
  • Customer panels include finance CFO office representatives from RedHat, Activision, Ivanti, and others.

 

 

RevConnect 2017 QOD #3      RevConnect 2017 QOD #1

 

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ASC 606 project with HMH: Part 3 – How We Solved the Compliance Puzzle https://www.aptitudesoftware.com/asc-606-project-hmh-part-3-solved-compliance-puzzle/ Wed, 28 Mar 2018 07:17:26 +0000 https://www.aptitudesoftware.com/?p=5968 The Compliance Puzzle
Part three:  HMH realizes the benefits of Aptitude RevStream. At Aptitude RevStream’s annual user conference – RevConnect 2017 – Aptitude RevStream customer Andy Nickerson, Finance Manager at Houghton Mifflin Harcourt (HMH), discussed his finance office and their adoption of automation. In their revenue recognition implementation project, HMH defined their bottlenecks and challenges, generated a wish list for their revenue […]
 

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The Compliance Puzzle

Part three:  HMH realizes the benefits of Aptitude RevStream.

At Aptitude RevStream’s annual user conference – RevConnect 2017 – Aptitude RevStream customer Andy Nickerson, Finance Manager at Houghton Mifflin Harcourt (HMH), discussed his finance office and their adoption of automation.

In their revenue recognition implementation project, HMH defined their bottlenecks and challenges, generated a wish list for their revenue automation, and found the right vendor to help them find a solution. So, how did Aptitude RevStream help solve HMH’s compliance and contract management challenges under the new compliance regulations?


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Solutions to business model key challenges:
Bottlenecks & challenges How Aptitude RevStream solved the challenge according to Nickerson.
Decentralized business units Aptitude RevStream “will give us the holistic view we need, of the whole business. We can run reports by business unit alone, by geography or at the company level. We just have to put in the configuration we want and RevStream will give us the data.”
Independent governance “We configure our rules, but importantly if there is a change – a rule change, interpretation change – it is a quick fix.
Program centered data “Aptitude RevStream helps bring our components and materials into a contract environment.”
Product volume “It becomes a holistic system that brings these (systems data) together and processes the revenue correctly.” Pulling data from resellers, while still a waiting game, is simplified by the ability to automate the process and make corrections within Aptitude RevStream
Historical SSP analysis. “Not a problem with (Aptitude) RevStream. It uses aggregated historical data, creates an average and then we get a Fair Value analysis as well.”
Upstream processing. “When we receive data into the system it is accurate … regardless of whether we are importing it from billing, sales or ERP systems.”
Impact of a new Chart of Accounts. “Aptitude RevStream will help us with this because we can just choose the report we want data on and run it. We pull this data straight into our reports.” ASC 605 and 606 can be viewed from a simple drop-down menu.
High volumes of transactions “This wasn’t an issue for (Aptitude) RevStream. It can handle our current volume, but also any growth in revenue.”

 

Aptitude RevStream was able to deliver a solution that met the business needs of both HMH and the finance office. Process and system reorganization is often one of the least anticipated changes brought about by ASC 606 compliance. Nickerson understood the reorganization and account analysis required and solved the rev rec puzzle with an intelligent, automated solution. HMH can now focus on growing their revenue from a sparkling back-end that matches their front-end operations.


Aptitude Software offers two levels of revenue recognition solutions: Aptitude Revenue Recognition Engine – a powerful, high-volume revenue automation tool, and Aptitude RevStream – a robust, user-configured, cloud-based, revenue management solution.


With thanks to Andy Nickerson for his thoughtful insights, as seen at RevConnect 2017.

Hear more customer stories at RevConnect 2018, May 16-17 in San Francisco.

Catch up on the HMH story:

Part 1 – ASC 606 Project with HMH – Business Model Challenges

Part 2 – ASC 606 Project with HMH – The Revenue Automation Wish List

Explore more:

Aptitude RevStream 5x Suite – product details

 

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Our CEO shares his thoughts with Accounting Today https://www.aptitudesoftware.com/ceo-shares-thoughts-accounting-today/ Wed, 21 Mar 2018 16:41:06 +0000 https://www.aptitudesoftware.com/?p=6196
Today’s CFOs may be feeling a bit overwhelmed when they consider the storm of accounting regulations that is approaching. New accounting standards around leasing (ASC 842/IFRS 16), insurance contracts (ASC 942/IFRS 17), revenue recognition (ASC 606/IFRS 15) and financial instruments (CECL/IFRS 9) are pushing CFOs to the limit.  The effects are being felt across the business, from […]
 

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Today’s CFOs may be feeling a bit overwhelmed when they consider the storm of accounting regulations that is approaching. New accounting standards around leasing (ASC 842/IFRS 16), insurance contracts (ASC 942/IFRS 17), revenue recognition (ASC 606/IFRS 15) and financial instruments (CECL/IFRS 9) are pushing CFOs to the limit.  The effects are being felt across the business, from customer contract structures to pricing, product design, tax and reporting.

But there is a silver lining.


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Our CEO Tom Crawford shares his thoughts on how CFOs can look for the opportunities within the current storm of standards.

Read the full article on Accounting Today.

 

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ASC 606 Project with HMH: Part 2 – The Revenue Automation Wish List https://www.aptitudesoftware.com/asc-606-project-hmh-part-2-revenue-automation-wish-list/ Wed, 21 Mar 2018 07:14:40 +0000 https://www.aptitudesoftware.com/?p=5964
Part Two: Selecting a vendor and scoping the project At Aptitude RevStream’s annual user conference – RevConnect 2017 – Aptitude RevStream customer Andy Nickerson, Finance Manager at Houghton Mifflin Harcourt (HMH), discussed his finance office and their adoption of automation. After analysis of their current business needs, HMH set out to test the revenue management vendor marketplace armed with […]
 

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Part Two: Selecting a vendor and scoping the project

At Aptitude RevStream’s annual user conference – RevConnect 2017 – Aptitude RevStream customer Andy Nickerson, Finance Manager at Houghton Mifflin Harcourt (HMH), discussed his finance office and their adoption of automation.


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After analysis of their current business needs, HMH set out to test the revenue management vendor marketplace armed with their Revenue Recognition Automation Wish List.

  • Cloud for power and speed.
  • Full control over contract arrangements – post contract adjustments, credits that have to be applied.
  • An automated system that could click, unblock and move arrangements.
  • Automated stand-alone selling price – important because each product and customer are unique.
  • Ease of configuration and ease of implementation.
  • End-user functionality – one single interface from one screen.
  • Robust disclosure reporting – ASC 606 increases disclosures.
  • Long-term partnership. “The customer experience between our revenue management vendor and us needs to be a highly effective relationship. We need to be able to get our questions answered and add components as needed,” Nickerson stated.

RevStream dominated each category. Met our requirements and exceeded with effective communication. They understood the need for solutions orientation.”

Andy Nickerson, Finance Manager, HMH.


What does an ASC 606 rev rec automation project look like?

With only two major pure players in the revenue recognition software space, Aptitude RevStream was the right fit and choice for HMH. Implementation was a 14-month project to get to the point they could meet ASC 606 compliance. The project had four distinct phases: contract data collection and cleansing, software implementation, upstream data loading, and testing. Most of the time on HMH’s project was spent getting the data clean and ready. HMH found that with 606 there was a huge amount of combing through original contracts. The actual software implementation itself was quick they noted, but the PM needed to ensure time was also allocated for the testing phase. Ordinarily, the company’s IT team will direct this before the implementation is confirmed to “go live”.

The project team was a 15-person cross-functional project team. It included an auditor and HMH’s technical partner (CFGI). Executive oversight was also in place and provided important buy-in and kept the project on track. The company used an agile project management methodology. It took many components, departments, and people to complete this project and this allowed each component to be tested independently and then as a whole. The size of the team, from customer experience, ran in line with the complexity of revenue and their expectations of how much of their revenue is material under ASC 606.

One of the reasons HMH had complex revenue was due to ASC 606’s need for recognition of performance obligations. This can be common for SAAS type business models. If you would like to read more, download our Case Study on Automating Performance Obligations (POBs).

More on POBs

With thanks to Andy Nickerson for his thoughtful insights, as seen at RevConnect 2017.


Aptitude Software offers two levels of revenue recognition solutions: Aptitude Revenue Recognition Engine – a powerful, high-volume revenue automation tool, and Aptitude RevStream – a robust, user-configured, cloud-based, revenue management solution.


Catch up on the HMH story:

Part 1 – ASC 606 Project with HMH – Business Model Challenges

Read more on ASC 606:

Build vs Buy: Revenue Automation to Manage ASC 606

 

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ASC 606 Project with HMH: Part 1 – Business Model Challenges https://www.aptitudesoftware.com/asc-606-project-with-hmh-part-1-business-model-challenges/ Tue, 20 Mar 2018 06:58:53 +0000 https://www.aptitudesoftware.com/?p=5953 Finding the right solution for your business model
Part One: Assessing the business model challenges of ASC 606 At Aptitude RevStream’s annual user conference – RevConnect 2017 – Aptitude RevStream customer Andy Nickerson, Finance Manager at Houghton Mifflin Harcourt (HMH), discussed his finance office and their adoption of automation. Companies spend big dollars on their customer-facing operations: automating, simplifying and offering great UI/UX. But what about the […]
 

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Finding the right solution for your business model

Part One: Assessing the business model challenges of ASC 606

At Aptitude RevStream’s annual user conference – RevConnect 2017 – Aptitude RevStream customer Andy Nickerson, Finance Manager at Houghton Mifflin Harcourt (HMH), discussed his finance office and their adoption of automation.

Companies spend big dollars on their customer-facing operations: automating, simplifying and offering great UI/UX. But what about the backend? Many big companies are operating on old enterprise systems, managing data via Excel spreadsheets, and aren’t keeping pace with new business needs. In the words of Gary Simon, CFO at FSN, “If your front end goes away and innovates at a rapid pace, and your backend office systems stay still, it’s going to break apart.”


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How prepared is your finance office for today’s business needs?

The first step in preparing for tomorrow is to understand today. HMH, a $1.4B public company, had transitioned to a SAAS business model and it was time for the back office to catch up. With the impact of ASC 606 appearing, HMH made the strategic decision to analyze their current financial systems and build an architecture ready for the changing future of accounting.

Understanding your business model

HMH sell online software, physical goods, and professional services through a number of different channels. They also operate in a high-volume reseller environment. Functioning in a decentralized business unit environment, contracts are multi-layered and frequently change as customers add, upgrade, and change products. Scoping the revenue stream was huge and complex for Nickerson and his team. Using manual spreadsheets in conjunction with their SAP ERP was difficult, not sustainable and not scalable. Just 12% of the revenue was in single element arrangements. The remaining 88% was “bundles and bundles, within bundles,” according to Nickerson.

Business model key challenges:
Business component Revenue Recognition Challenge
Decentralized Business Units (BU) While great for business, the revenue management can be challenging. Data collation, separation, and reporting can be tough.
Independent governance Forming the revenue governance around these BUs was crucial as well as demanding. It required a genuine team investment.
Program centered data ASC 606 centers on contract data so input data would likely need reconfiguration to catch essential data points.
Product volume A high number of SKUs, material offerings, and bundles would need tracking and management.
High volumes of transactions 6 million transactions per quarter across 19,000 SKUs.

What does it take to get to compliance?

The biggest question for the finance office was ‘what will it take to get compliant’? ASC 606 changes the focus to contracts and performance obligations. For some companies, there is little effect on their revenue recognition. For others, particularly SAAS business models, the effort is significant. After engaging a consultant and getting a grasp on the project, HMH focused on their rev rec challenges and bottlenecks. Using the three P’s of Project Management: people, product, and process, helped them to focus the investigation.

Who can help relieve challenges for people, product, and process?

People in the finance office were struggling with the increased workload from acquisitions already. Excel spreadsheets were becoming increasingly larger, longer, and harder to manage. Pulling lines from each contract and separating them into performance obligations is a labor-intensive job and any labor-intensive job, at an accountant’s pay rate, needed to be streamlined.

Reduction of future workload was something HMH hit on early, making the early decision to recast using a Modified Retrospective  approach to ASC 606. This, they assumed, would mean less work as they could run dual systems, one in 605 and one in 606, without having to restate. The impact of producing this new 606 Chart of Accounts needed to be considered in their processes moving forward.

Changing the way products are sold to bring the sales model more in line with revenue recognition is one solution HMH considered.  At Aptitude RevStream we have seen companies (VMware) successfully use ASC 606 as a catalyst for business model transformation. This is a huge, multi-year project and not for the faint of heart. Changing the way products are sold can greatly simplify rev rec but, that is a much larger and longer project than HMH was ready to take on. Revenue automation appeared to be the best way to manage the changes ASC 606 was bringing. No extra headcount would be needed as revenue expanded, processes could be simplified through automation, and complex sales contracts could be handled with automated debundling and POB triggers.


Aptitude Software offers two levels of revenue recognition solutions: Aptitude Revenue Recognition Engine – a powerful, high-volume revenue automation tool, and Aptitude RevStream – a robust, user-configured, cloud-based, revenue management solution.


With thanks to Andy Nickerson for his thoughtful insights, as seen at RevConnect 2017

For more customer stories, join us at Aptitude RevStream’s Annual User Conference – RevConnect 2018, May 16-17 in San Francisco, California, U.S.A.

 

Further ASC 606 resources:

Start preparing for revenue automation – checklist, worksheet & timeline

 

Want to hear more from Aptitude Software? Follow our Twitter account for blog alerts.

 

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Still Assessing the Impact of ASC 606 or IFRS 15? Read This. https://www.aptitudesoftware.com/still-assessing-the-impact-of-asc-606-or-ifrs-15-read-this/ Fri, 09 Mar 2018 07:48:44 +0000 https://www.aptitudesoftware.com/?p=5976 Assessing compliance
Private companies may be under the belief that because their revenue recognition seems straightforward, ASC 606 does not impact them materially. This was certainly the way 24 Hour Fitness thought of revenue recognition compliance. “My initial thoughts were –  we are a gym, everything is pretty straightforward,” remarked Kristine Stebbins, VP of Accounting at 24 Hour Fitness. She […]
 

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Assessing compliance

Private companies may be under the belief that because their revenue recognition seems straightforward, ASC 606 does not impact them materially. This was certainly the way 24 Hour Fitness thought of revenue recognition compliance. “My initial thoughts were –  we are a gym, everything is pretty straightforward,” remarked Kristine Stebbins, VP of Accounting at 24 Hour Fitness. She would soon find out that wasn’t exactly the case.

24 Hour Fitness has over 4 million members and 400 clubs across the U.S. Memberships are offered on a month to month basis or a longer contracted term, following the payment of an upfront membership fee. The result is approximately 40 million transaction lines per month. The environment is one of high volume and fairly routine accounting entries. Their accounting systems, however, were struggling with the business growth and ASC 606 would only make it worse. Existing systems were mostly 14 years old; an Oracle billing system for AR and orders, PeopleSoft for their GL and custom systems for retail and training.  These systems were supplemented with many Excel spreadsheets.


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It took a huge effort to produce data the way 24 Hour Fitness wanted it to be. The old systems couldn’t quite capture what was needed in the modern business of today. The amalgamation of systems was high risk from an accuracy point of view, “amortizing on spreadsheets was something we really needed to move away from,” Stebbins said. A recognition of failing, inadequate systems was acknowledged. They needed to make a change to increase efficiency and also to manage the new compliance requirements.

ASC 606, a catalyst to change

Stebbins plan of attack was to first approach the systems. “With 606 we weren’t going to put a new process on top of the existing systemsWe knew it was going to break, we just didn’t know when,” Stebbins noted. She also reiterated what many customers have said, that “606 just moves people along.”  Whether it gives credence to upgrade requests or a greater sense of urgency, compliance is the push that many departments need to justify the expense of a new system.

The effort of integrating contract data into a system

After scoping and designing a solution, Stebbins realized it was going to be a big effort for them to do the data integration. ASC 606 requires a different way of looking at contracts which can double the workload in many cases. This process of data extraction for 606 is quite intensive. The right data needs to be extracted at the right time with the appropriate transformation. Data also needs to be checked to see if it has been combined or chopped off when extracting the transfer load. By going through the process of extracting, transforming and loading their data as a team, the 24 Hour Fitness finance office was able to discover where the data deficiencies and gaps were in the contract data and then fix that break. The result of this intimacy with their contract data was a more insightful and intelligent validation of their rules and configurations when the time came to put that data into their new system.

An empowered finance office

Implementing Aptitude RevStream’s out-of-the-box, configurable solution gave 24 Hour Fitness the ability to take on the functionality and configuration themselves without pulling in their IT team or an external team of consultants. In the past, the team was stuck using spreadsheets to manipulate and aggregate data. Now they work from a single source of truth that they know and trust. By being an active partner in the implementation, they got to understand Aptitude RevStream well and definitely love the efficiency improvements in their day to day life. “RevStream gives us the flexibility on the accounting team to create new use cases as business processes changed without waiting for IT or having to find a manual solution,” Stebbins added. Knowing what and why you run configurations and rules help teams in the long run. In the short term, it certainly saves on professional services. In the long term, the team is empowered and prepared for business growth & new compliance regulations that emerge.

The finance office now has great confidence in their decisions and can see the accuracy and efficiency gains. Further, as the company expands through growth and/or acquisitions, they will be able to expand and/or integrate new data into Aptitude RevStream themselves. This is a definite cost saver for growing companies.

Advice for those still evaluating their position on automation

When asked if she had any advice for private companies who are still implementing ASC 606, Stebbins suggested:

  • Map out your revenue scenarios. Assess the impact of today’s GAAP (605) and tomorrow’s GAAP (606).
  • Check with your auditor. In fact, involve your auditors straight away.
  • Assess if your current systems can support the change. If you need to rely heavily on patches such as formulaic spreadsheets, consider the business risk.
  • Partner with your IT department to create a sense of urgency and to leverage their knowledge. 24 Hour Fitness’ IT department began the search and encouraged Stebbins to look for a new system to achieve automation.
  • If you are unsure, partner with an external analyst. The cost today is minimal compared to the fallout of a financial restatement or delayed reporting. 

The right solution for revenue management automation

24 Hour Fitness run an efficient back office, but the heavy manual workaround left limited in-house resources to draw from for this project. Aptitude RevStream was the right choice of revenue management solution for this finance office because they now have:

  • A single source of truth that pulls data from many systems.
  • Vastly improved resource efficiency.
  • An invested and involved finance team that can self-solve and configure revenue rules.
  • A system that is ready for future growth.
  • Achieved a streamlined reporting process for ASC 606 compliance.

An empowered finance office succeeds

For our Aptitude RevStream solution, we believe in empowering finance offices to understand their software and to fully utilize it. New in 2018 is a fully developed training module, built around empowered teams such as 24 Hour Fitness. RevConnect 2018 will unveil our new training modules for users, presented in a one-off Bootcamp style session this May. Join us at RevConnect 2018.

 

If you need help planning your ASC 606 or IFRS 15 revenue recognition project we have a number of resources for you, beginning with:

Getting started with ASC 606/IFRS 15


Aptitude Software offers two levels of revenue recognition solutions: Aptitude Revenue Recognition Engine – a powerful, high-volume revenue automation tool, and Aptitude RevStream – a robust, user-configured revenue management cloud solution.


 

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Aptitude Software
Multinational companies could be heading for a ‘leaseberg’ of huge proportions https://www.aptitudesoftware.com/multinational-companies-heading-leaseberg-huge-proportions/ Tue, 27 Feb 2018 17:48:17 +0000 https://www.aptitudesoftware.com/?p=5840
For large, multinational companies, a shift to the new leasing standard (IFRS 16/ASC 842) will cause unforeseen impact. Aptitude Software is today announcing the ‘Leaseberg’ index to highlight the relative value of leased assets by sector and the accounting challenges that lie below the surface. View larger image [pdf-embedder url=”https://www.aptitudesoftware.com/wp-content/uploads/Aptitude-Leaseberg-infographic.pdf” title=”Aptitude Leaseberg infographic”]   For […]
 

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For large, multinational companies, a shift to the new leasing standard (IFRS 16/ASC 842) will cause unforeseen impact.

Aptitude Software is today announcing the ‘Leaseberg’ index to highlight the relative value of leased assets by sector and the accounting challenges that lie below the surface.


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View larger image

[pdf-embedder url=”https://www.aptitudesoftware.com/wp-content/uploads/Aptitude-Leaseberg-infographic.pdf” title=”Aptitude Leaseberg infographic”]

 

For multinational companies, operational leases represent a material proportion of a companies’ balance sheets. 

Whereas lease commitments have always been ‘in view’ in the form of disclosures, analysts and rating agencies have always had to add in these commitments in each of their models and perform valuations using their own assumptions about these commitments. The new rules force companies to precisely account for the ‘actually expected future cash flows in the statement of financial position, in terms of both precise amounts and timing.’ The change will likely affect financial ratios such as the ratio of net debt to EBITDA (gearing).

As the massive value of off-balance sheet liabilities is brought into view, CFO’s must apply accounting consistently and appropriately across a huge value and volume of leases.

ASC 842 and IFRS 16 are accounting issues, not lease management projects. There are some real complexities in applying the new rules for things such as sub-leases, lease transfers and multi-GAAP accounting. 

Not getting lease accounting right could sink ships.

As financial accounting experts, we stand to help steer CFO’s through this icy patch. 

 

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Saso Novoselic
KPMG & Aptitude Software unite around IFRS 17 https://www.aptitudesoftware.com/kpmg-aptitude-software-unite-around-ifrs-17/ Thu, 22 Feb 2018 15:21:56 +0000 https://www.aptitudesoftware.com/?p=5800 Create Strong Business Partnership, Building Trust
Recent surveys from KPMG & Aptitude Software suggest that most insurers are far from ready for IFRS 17, with over 80% of organizations still in the pre-assessment or assessment phase. With this in mind, we are pleased to announce that our organizations are joining together to help insurers efficiently prepare for the challenges of IFRS 17. […]
 

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Create Strong Business Partnership, Building Trust

Recent surveys from KPMG & Aptitude Software suggest that most insurers are far from ready for IFRS 17, with over 80% of organizations still in the pre-assessment or assessment phase.

With this in mind, we are pleased to announce that our organizations are joining together to help insurers efficiently prepare for the challenges of IFRS 17. (Read the full KPMG press release.)


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Mary Trussell, Global Insurance Change Leader, KPMG International sums up the value of the partnership stating, “IFRS 17 is much more than just a technical accounting standard.  KPMG professionals take a top-down approach that looks at the full impact on the insurer’s business and legacy systems, bringing together data, systems and process know-how with actuarial and accounting expertise. Now, integrating Aptitude Software solutions can accelerate the design and implementation of critical systems.”

The Aptitude Software IFRS 17 Solution is built on our proven specialist software IP, financial accounting expertise, and experience leading large-scale IFRS change programs. We’ve spoken with over 100 insurers about their IFRS 17 projects and we’d love to share what we’ve learned with you.  Get in touch at marketing@aptitudesoftware.com.

 

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