What is the primary benefit of using RevRec?
What is the major difference between RevRec and other revenue-recognized tools?
automates the capture and analysis of revenue contract data and provides the required financial reporting under ASC 606. To learn more about 606 you can read this great document by the AICPA.
In RevRec the revenue workflow starts by either automatically or manually bringing in your completed (final/signed) deals or sales orders into RevRec. If you already track sales through a CRM or billing system you can completely automate the integration of these orders into RevRec. If not you can enter them directly here and track changes on these transactions.
For each sales order, RevRec will automatically create a revenue arrangement in accordance with ASC 606 based on your stand-alone selling price (SSP) library. You can go into a revenue arrangement and view the performance obligations under the arrangement, how the standalone price was determined for each piece, what was allocated and how it will be recognized.
Each product or service sold on the sales order (called a sales order item) is linked to an individual 'revenue plan' that is determined by the corresponding rule for that product in the SSP library.
Similar to the revenue plan there is also a 'commission plan' that is part of the revenue arrangement and is used to track the amortization of any commissions that were paid as a part of the sales order.
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