A majority of public companies are unable to finalize their
revenue numbers on time, according to a recent survey. In fact,
delays can last up to three weeks.

The survey by
Revenuerecognition.com in conjunction with IDC polled senior
financial executives from 578 companies, mostly in the U.S. It found
two factors for the delays: Transactions are becoming more complex
and revenue accounting data is not available in time. These problems
are more pronounced at public companies; 57 percent reported making
adjustments after the books were officially closed.

“This finding is symptomatic of companies not investing in
revenue-management processes in proportion to the complexity and
importance of the problem,” says Gottfried Sehringer, executive
editor of Revenuerecognition.com. “Other complex financial data is
readily available from enterprise financial reporting systems, but
revenue — the biggest and most visible number of all — slips through the
cracks. To compensate, companies are using spreadsheets, in spite of
the fact that they identified spreadsheet use as one of the top
challenges to ensuring their revenue policies are being applied
accurately and consistently.

“The fact that complex transactions are the leading cause of
delay in revenue reporting is a clear sign that underlying processes
and systems have not kept up with changes in the business
environment,” said Kathleen Wilhide, research director, GRC and BPM
solutions, at IDC. “Enterprise standards for revenue-reporting
processes have not evolved to the point of best practices, but they
must because manual approaches cannot ensure the accuracy and
availability of revenue data within the standard financial close
timeline.”

The survey also found that revenue recognition is among the top
three ongoing control risks for finance departments. Contract
management was ranked number one and using spreadsheets was number
two.