The document summarizes presentations from a CFO leadership breakfast on technology, tools, and trends for finance leaders. Linda Pinion discusses how CFOs can become more tech-savvy by making metrics timely, relevant, accurate and actionable for managers using cloud ERP systems. David Marroncelli then discusses the new ASC 606 revenue recognition standard and how it establishes a five-step approach that differs from previous GAAP guidelines. The standard takes effect for private companies after December 2018.

1. CFO Leadership Breakfast
The Future of Finance
Technology, Tools, & Trends

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. 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. © 2019 The Sage Group plc or its licensors. All rights reserved.
Becoming A Tech Savvy
CFO
Linda Pinion
June 25, 2019

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. © 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. © 2019 The Sage Group plc or its licensors. All rights reserved.
Are You Ready To Be a Tech-Savvy CFO?
CFO

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. © 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. © 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. © 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. © 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. © 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. © 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. © 2019 The Sage Group plc or its licensors. All rights reserved.
Bringing Relevance to Financial Data
GAAP
Performance
Transaction
Data

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. © 2019 The Sage Group plc or its licensors. All rights reserved.
Modern ERP Systems Capture Context at the
Source

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. © 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. © 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. © 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. © 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. © 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. © 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. © 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. © 2019 The Sage Group plc or its licensors. All rights reserved.
What does the “The
Future of Finance:
Technology, Tools, &
Trends” Look Like?

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. 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. ASC 606 – What you Need to Know
David Marroncelli, CPA, MBA
Principal
Johnson O’Connor

30. Revenue from Contracts with
Customers (FASB ASC Topic 606)

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Q&A
#LearningWithBrainSell

49. Ready to Move
Your ERP to the Cloud?
Schedule a customized
Sage Intact demo now!
bit.ly/brainselldemo
Next Step

50. Thank You for Attending!
info@brainsell.net
(866) 356-2654
www.brainsell.net