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The Future of Finance: Technology, Tools, & Trends

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With so many disruptive technologies hitting the scene, the world of finance and accounting has been cracked wide open.

Leveraging the cloud, automation, and digitization are just the surface for working faster and smarter.

Check out the slides from our recent breakfast seminar to learn everything you need to keep pace today and beyond.

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The Future of Finance: Technology, Tools, & Trends

  1. 1. CFO Leadership Breakfast The Future of Finance Technology, Tools, & Trends
  2. 2. About BrainSell • Founded in 1994 • Unbiased business consultants • We help companies thrive by solving their business challenges with guidance and technology. • Specialize in ERP, CRM, Business Intelligence and Marketing Automation software #LearningWithBrainSell
  3. 3. Today’s Presenters #LearningWithBrainSell Linda Pinion Principal Solutions Architect Sage Intacct “The Tech-Savvy CFO” David Marroncelli, CPA, MBA Principal Johnson O’Connor “Closing the Gap on GAAP Compliance”
  4. 4. © 2019 The Sage Group plc or its licensors. All rights reserved. Becoming A Tech Savvy CFO Linda Pinion June 25, 2019
  5. 5. © 2019 The Sage Group plc or its licensors. All rights reserved. Introductions [insert photo] Linda Pinion Principal Solution Consultant Linda.Pinion@Sage.com MY FOCUS General Business Vertical Sales MY EXPERIENCE Seasoned professional with Financial Solutions, Distribution and Manufacturing execution. Vertical expertise in High Tech, Manufacturing, Hospitality, Healthcare and Services.
  6. 6. © 2019 The Sage Group plc or its licensors. All rights reserved.© 2018 The Sage Group plc or its licensors. All rights reserved. 6 New Demands for Growth Yesterday EFFICIENCY WAS GOOD ENOUGH One market One model One product All about cost savings Today YOU NEED TO GROW AND SUSTAIN New markets New models New products Being fast and nimble The cloud can get you there ”“
  7. 7. © 2019 The Sage Group plc or its licensors. All rights reserved. Are You Ready To Be a Tech-Savvy CFO? CFO
  8. 8. © 2019 The Sage Group plc or its licensors. All rights reserved. Are You Ready To Be a Tech-Savvy CFO? CFO Customers Finance Team Board Executive Team
  9. 9. © 2019 The Sage Group plc or its licensors. All rights reserved. Are You Ready To Be a Tech-Savvy CFO? CFO Customers Finance Team Board Technology Executive Team
  10. 10. © 2019 The Sage Group plc or its licensors. All rights reserved. The Pace of Change is Driving the Need for Insight Growth “Has the new pricing model reduced churn?” “Are we hitting our revenue per customer targets?” “Are our new services offerings as profitable as the existing ones?” “Why are operating costs higher for our newest locations?”
  11. 11. © 2019 The Sage Group plc or its licensors. All rights reserved. CFOs Are Still Viewed as the “Single Source of Truth” • The holders of quantitative truth • The truth that’s the basis of outside investment in the organization • The truth that helps inform internal decisions • Impartial: Investment decisions don’t usually impact finance operations
  12. 12. © 2019 The Sage Group plc or its licensors. All rights reserved. An Abundance of Visibility… Decreased 15% Stayed the same 21% Increased 64% Change in amount of data contained in management reports over past two years Reporting statistics • Average length of management report: 21 pages • Data points: 6,000 – 7,500 BUT… Sources: CEB, “High Impact Performance Management, and Intacct, “CFO Perspectives Survey”
  13. 13. © 2019 The Sage Group plc or its licensors. All rights reserved. …And a Shortage of Insight Decreased 15% Stayed the same 21% Increased 64% Change in amount of data contained in management reports over past two years Average amount of data deemed useful in management reports Useful 5% Not useful 95% Reporting statistics • Average length of management report: 21 pages • Data points: 6,000 – 7,500 80% of CFOs Rank Reporting as the #1 Initiative BUT… Sources: CEB, “High Impact Performance Management, and Intacct, “CFO Perspectives Survey”
  14. 14. © 2019 The Sage Group plc or its licensors. All rights reserved. Make metrics timely 3 To Replace Visibility with Insight, Become Tech-Savvy Make metrics relevant1 Keep metrics accurate2 Make metrics actionable for managers 4
  15. 15. © 2019 The Sage Group plc or its licensors. All rights reserved. Bringing Relevance to Financial Data GAAP Performance Transaction Data
  16. 16. © 2019 The Sage Group plc or its licensors. All rights reserved. Bringing Relevance to Financial Data GAAP Performance Transaction Data Metrics aligned w/strategy Operational measures
  17. 17. © 2019 The Sage Group plc or its licensors. All rights reserved. Modern ERP Systems Capture Context at the Source
  18. 18. © 2019 The Sage Group plc or its licensors. All rights reserved. Ensuring Insights Stay Relevant and Accurate Simplify Data Entry Enforce Controls Change Context Without IT
  19. 19. © 2019 The Sage Group plc or its licensors. All rights reserved. Relevance and Accuracy for Insight Best-in-Class Cloud ERP GAAP performance Transaction data Metrics aligned w/strategy Operational measures
  20. 20. © 2019 The Sage Group plc or its licensors. All rights reserved. Make metrics timely 3 To Replace Visibility with Insight, Become Tech-Savvy Make metrics relevant Keep metrics accurate Make metrics actionable for managers 1 2 4
  21. 21. © 2019 The Sage Group plc or its licensors. All rights reserved. Create Quick Understanding Through Visualization Tell a Broader Story (Visual Indicator over Time) Say More with Less (Specific Business Line) Focus Attention (Cost of Sales)
  22. 22. © 2019 The Sage Group plc or its licensors. All rights reserved. Make metrics timely To Replace Visibility with Insight, Become Tech-Savvy Make metrics relevant Keep metrics accurate Make metrics actionable for managers 1 2 4 3
  23. 23. © 2019 The Sage Group plc or its licensors. All rights reserved. The Need for Decision-Making Information Drives the Need for a Fast Close… Source: Adra Match Market Survey Pressure to Close Faster 90%
  24. 24. © 2019 The Sage Group plc or its licensors. All rights reserved. The Lack of Automation Hinders a Fast Close Manual allocations and accruals for expenses Manual entries for depreciation, amortization, and adjustments Manual revenue recognition Manual consolidations, currency conversions, intercompany eliminations
  25. 25. © 2019 The Sage Group plc or its licensors. All rights reserved. Sage Intacct’s Key Technology Initiatives Eliminate the Close Continuous Audit Predictive Analytics Intacct is Transforming the System of Record into the System of Intelligence
  26. 26. © 2019 The Sage Group plc or its licensors. All rights reserved. What does the “The Future of Finance: Technology, Tools, & Trends” Look Like?
  27. 27. Solution Presentation © 2019 The Sage Group plc or its licensors. Sage, Sage logos, Sage product and service names mentioned herein are the trademarks of The Sage Group plc or its licensors. All other trademarks are the property of their respective owners.
  28. 28. Thank you! © 2019 The Sage Group plc or its licensors. Sage, Sage logos, Sage product and service names mentioned herein are the trademarks of The Sage Group plc or its licensors. All other trademarks are the property of their respective owners.
  29. 29. ASC 606 – What you Need to Know David Marroncelli, CPA, MBA Principal Johnson O’Connor
  30. 30. Revenue from Contracts with Customers (FASB ASC Topic 606)
  31. 31. Overview • Where is the new guidance? • Why the change? • What are the new requirements? • How do these requirements differ from existing GAAP? • When is it effective? • How do we begin to implement?
  32. 32. Where Is the New Guidance? • Primarily contained in FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) • Amended by six subsequent Accounting Standards Updates: • ASU No. 2015-14, Deferral of the Effective Date • ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) • ASU No. 2016-10, Identifying Performance Obligations and Licensing • ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients • ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers • ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)
  33. 33. Why the Change? • Revenue is a critical financial measure for most entities and their owners, lenders, and other stakeholders. • The FASB and IASB both identified weaknesses and areas for improvement in the accounting for revenue. Both groups also concluded that current disclosure requirements were inadequate.
  34. 34. New Requirements • A principles-based approach • Revenue should be recognized in a way that reflects the transfer of promised goods or services to customers, and • The amount of revenue recognized should equal the consideration to which an entity expects to be entitled for those promised goods or services.
  35. 35. Scope and Scope Exceptions • Includes all contracts with customers to transfer goods or services; includes transfer of nonfinancial assets • Excludes transactions that are not a contract to transfer goods or services to a customer for consideration, such as fundraising contributions for health care and nonprofit entities • Also excludes the following: • Lease contracts • Insurance contracts • Financial instruments
  36. 36. Five-Step Approach • Topic 606 establishes a five-step approach for recognizing and measuring revenue: • Step 1: Identify customer contracts. • Step 2: Identify performance obligations. • Step 3: Determine the transaction price. • Step 4: Allocate the transaction price to performance obligations. • Step 5: Recognize revenue when or as performance obligations are satisfied.
  37. 37. Five-Step Approach (con’t) • Step 1: Identify customer contracts. A contract is an agreement between at least two parties that includes enforceable rights and obligations. Certain criteria must be met in this step to permit revenue recognition. For example, an agreement does not have to be in writing but there must be approval from all parties.
  38. 38. Five-Step Approach (con’t) • Step 2: Identify performance obligations. A performance obligation is a promise in a contract with a customer to transfer distinct goods or services to that customer. If multiple goods or services are promised in a contract, they may need to be combined into distinct bundles.
  39. 39. Five-Step Approach (con’t) • Step 3: Determine the transaction price. The transaction price is the amount an entity expects to be entitled to for fulfilling its obligation to transfer the promised goods or services to a customer. This amount does not include amounts collected on behalf of third parties. The effects of variable consideration, the time value of money, noncash consideration, and consideration payable to the customer need to be considered when determining the transaction price.
  40. 40. Five-Step Approach (con’t) • Step 4: Allocate the transaction price to performance obligations based on the amount of consideration an entity expects to be entitled to in exchange for satisfying the performance obligation. Allocation is normally based on the relative standalone selling price of each performance obligation.
  41. 41. Five-Step Approach (con’t) • Step 5: Recognize revenue when (or as) performance obligations are satisfied. Performance obligations are satisfied by transferring a promised good or service to a customer. The good or service is considered transferred when (or as) the customer obtains control. A performance obligation may be satisfied over time or at a point in time.
  42. 42. How These Requirements Differ from Current GAAP • The current revenue recognition guidance primarily looks at when the revenue is earned and realizable. • The new guidance applies the following common criteria: • Persuasive evidence an agreement exists • Delivery has occurred or service has been rendered • The price is fixed or determinable • Collectability is reasonably assured • Current GAAP also has extensive industry-specific guidance that is not in the new guidance
  43. 43. How These Requirements Differ from Current GAAP (con’t) • Current GAAP requires very few disclosures about revenue; primarily accounting policy-related • New guidance includes many more required disclosures about revenue
  44. 44. Effective Dates • For all nonpublic entities, the guidance is effective for annual reporting periods beginning after December 15, 2018, and any interim periods in the subsequent annual period. Early application is permitted, with certain limitations.
  45. 45. Implementation Options • FASB ASC 606 requires retrospective adoption using either: • A full retrospective adoption for all prior periods presented in the period of adoption, or • A modified retrospective adoption with a cumulative effect adjustment as of the date of initial application.
  46. 46. How Do You Begin to Implement? • This new guidance may affect your revenue recognition, measurement, and disclosures, as well as your operations, systems, processes, and internal controls. • Some entities will be able to implement with very little effort; however, others may need significant effort from several employees.
  47. 47. How Do You Begin to Implement? (con’t) • Implementation typically involves: • Assigning responsibility and developing awareness • Determining the impact of the guidance • Selecting a transition method • Making needed changes to operations, systems, processes, and internal controls • Training staff • Discussing expected changes with financial statement users and stakeholders
  48. 48. Q&A #LearningWithBrainSell
  49. 49. Ready to Move Your ERP to the Cloud? Schedule a customized Sage Intact demo now! bit.ly/brainselldemo Next Step
  50. 50. Thank You for Attending! info@brainsell.net (866) 356-2654 www.brainsell.net

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