Changes in Revenue Recognition for Software-Dependent Hardware

Changes that impact revenue recognition now allow companies to delay revenue reporting if their hardware is reliant upon software for functionality elements. As David Lewandoski, audit partner at Grant Thorton explains, the revenue can now be recognized once the hardware and software have both been released. While this isn’t creating new revenue, explains Lewandoski, it does change the bookkeeping  process (immediate versus future revenue). Companies that rely on software to provide functionality to their hardware can now use this to more accurately manage profits. For more information on this accounting change, watch the video from OpenView Labs featuring Lewandoski.

Using Times of Change to Improve a CEO's Relationships

Times of change can be rocky, but they also present an excellent opportunity for CEOs and their leadership teams to emphasize teamwork. David Lewandoski, Audit Partner at Grant Thorton, suggests having the CEO sit down with his/her CFO and sales teams to… Discuss how to get pricing down Reexamine deliverables Restructure the team in the best possible way to eliminate the chance of unwanted surprises You’ll be surprised how a few straightforward conversations with the finance department can lead to improved results. Watch the rest of David’s chat with OpenView!

Changes in Lease Accounting Means Stricter Bookkeeping

Software companies don’t often hold many leases because of the nature of their operations. A software company will have very few concurrent leases, unless it operates retail locations. Despite this, many software companies will soon be pulled into the accounting and finances world as a result of a regulatory change to the guidelines for reporting leases. In a few years times, companies will be required to put all of their active leases on their books. Previously, they were allowed to keep a lease off of the ledger, depending on how they chose to classify it. This change will add a level of…

Establishing a Best Estimated Selling Price

A best estimated selling price can be a crucial tool to help you manage a revenue stream and your product positioning. With it, you can accurately calculate pricing based on your company’s business growth strategies. In order to create a best estimated selling price, you need to consider how much of a profit margin you’re looking to reach. Additionally, you need to establish a baseline model that you will go to for future pricing estimates. Using a selling price estimate, you’re able to gauge how your product should sell and what it should sell for. As a result, you’re going…

The Importance of Expanded Disclosure Requirements

Investment firms value companies that have an intricate knowledge of their finances. A large part of this involves promoting transparency at every juncture. One of the most efficient and effective ways to accomplish this is to push for expanded disclosure requirements for your finances. By doing this, you can supplement basic, raw data, giving it a qualitative aspect in addition to the quantitative one. Companies that push for this procedure through their bookkeeping tend to have a much better grasp of their finances, as compared to those that don’t. Essentially, it adds a storyline to black and white data that doesn’t provide…