Navigating the world of GAAP accounting standards can be daunting. But one particular compliance standard, ASC 606, seems to cause the most loss of sleep at night for Controllers.
Between defining revenue policies, keeping documentation up to date, and navigating judgment-based rule definition, ASC 606 compliance presents significant challenges.
In many cases, the complexity of ASC 606 results in a tangled web of revenue data spread across disparate systems and workflows. If you’re struggling with these challenges, you’re not alone.
If you’re wondering where to start in evaluating ASC 606 solutions, we’ve got you covered. This guide breaks down what Controllers need to know about ASC 606 software, the key challenges it addresses, and how to choose the right vendor.
Why ASC 606 Matters for Controllers
Building compliant and sustainable procedures is a core part of their role, especially when navigating complex frameworks like ASC 606.
Since 2018, ASC 606 serves as the latest revenue recognition standard developed by the Financial Accounting Standards Board (FASB). Standardizing revenue recognition practices under ASC 606 ensures companies recognize revenue consistently across industries.
However, ASC 606 also requires significant judgment—Controllers must craft revenue recognition policies that align with the standard’s requirements while accommodating their organization’s unique contracts and business models.
Ultimately, with ASC 606, controllers can help their organizations:
- Accurately recognize revenue across diverse business models
- Strengthen relationships with internal and external auditors
- Enhance stakeholder confidence through reliable financial statements
Common Challenges with ASC 606
- Complex contracts: Real-world contracts often include non-standard terms and one-off agreements, making it difficult to track performance obligations accurately. Many agreements feature multi-element arrangements, requiring distinct revenue recognition treatments for each obligation.
- Variable considerations: Estimating discounts, rebates, or penalties is challenging, especially when revenue isn’t recognized consistently across contracts. Controllers must apply judgment and flexibility in determining expected revenue adjustments.
- System alignment: Ensuring data continuity across disparate systems is a key challenge for Controllers and Revenue Accounting teams. Revenue data often resides in multiple systems, creating inconsistencies and inefficiencies. Centralizing this data in a single system improves accuracy and reduces errors.
- High-volume data: As transaction volumes grow, spreadsheets and manual processes become unsustainable. Companies need advanced tools that process data quickly, accurately, and at scale to ensure compliance and financial reliability.
- Lengthy month-end close: The reconciliation process for ASC 606 compliance often extends month-end close cycles, delaying reporting and increasing stress for accounting teams. Automating revenue recognition processes can significantly reduce the time required for month-end close.
Automating ASC 606 Revenue Recognition
To address these challenges, many companies are turning to revenue recognition software. The right solution can automate compliance, improve accuracy, and enhance efficiency. Here’s what to look for when evaluating software vendors:
Key Features to Look for in ASC 606 Software
- Automated Revenue Recognition: Ensure the system can handle multi-element arrangements, variable considerations, and complex contract structures with ease.
- Audit-Ready Compliance: Look for software that provides detailed audit trails, ensuring transparency and simplifying the audit process.
- Integration Capabilities: The software should seamlessly integrate with ERP, CRM, and billing systems to maintain data continuity.
- Scalability: Choose a solution that can handle growing transaction volumes without performance degradation.
- Flexible Rule Configuration: Controllers should have the ability to define and modify revenue recognition rules to align with evolving business needs.
Table Stakes vs. Advanced Features
When evaluating revenue recognition software, it’s important to distinguish between essential, must-have features and advanced capabilities that provide additional benefits. Below is a comparison:
| Feature | Table Stakes | Advanced |
| Automated Revenue Recognition | ✓ | ✓ |
| Audit-Ready Compliance | ✓ | ✓ |
| Customizable Revenue Rules | ✓ | ✓ |
| Journal Entry Creation | ✓ | ✓ |
| Integration with ERP & CRM | ✓ | |
| High-Volume Data Processing | ✓ | |
| Advanced Contract Modifications | ✓ | |
| AI-Powered Revenue Forecasting | ✓ | |
| Standalone Selling Price Calculation | ✓ | |
| Hybrid revenue rules | ✓ | |
| Real-Time Revenue Analytics | ✓ | |
| Multi-Currency & Multi-Entity Support | ✓ |
For a more in depth vendor comparison, see the Top 20 Revenue Management Software Providers in 2025.
How to Select the Right Vendor
Choosing the right ASC 606 software solution requires careful evaluation. Follow these steps to identify the best fit for your organization:
- Assess Internal Requirements – Identify pain points in your current revenue recognition process and determine must-have features.
- Research the Market – Explore available solutions and review customer feedback to understand how vendors address ASC 606 challenges.
- Request Demos and Trials – Engage vendors for product demonstrations and request trial access to evaluate usability and feature functionality.
- Evaluate Implementation and Support – Consider the vendor’s onboarding process, customer support availability, and training resources.
- Check References – Speak with existing customers to gain insights into their experience with the software.
To Wrap Up
ASC 606 compliance is complex, but the right revenue recognition software can simplify the process, reduce manual work, and ensure accuracy. Controllers play a critical role in selecting and implementing a solution that streamlines compliance, improves reporting, and supports business growth.
By understanding the challenges and evaluating solutions strategically, Controllers can ensure their organization is well-equipped to navigate ASC 606 with confidence.
