Revenue recognition remains one of the most challenging areas for Finance teams to navigate. The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) continue to update regulations—the publication of ASC 606, for example—creating an even greater need for accurate financial reporting and strategic decision-making.

But before we can work toward solutions to these revenue recognition challenges, we first need to understand the foundational, day-to-day pain points teams are experiencing. 

To do this, we went straight to the source: Finance leaders. We talked to CFOs, VPs, and Heads of Finance at SaaS companies ranging from 200 to 5,000 employees to uncover:

  • The biggest challenges and bottlenecks in managing revenue recognition
  • How these issues impact workflow, reporting accuracy, and compliance
  • The implications when revenue is not recognized accurately
  • What is most important in a revenue recognition solution
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The Biggest Revenue Recognition Pain Points

Our conversations made it clear that managing revenue recognition is no easy feat for Finance leaders. Shocking, we know. The challenges each exec is facing ran the gamut, but three stood out as the most common (and impactful).

Compliance and Audit Challenges:

Nearly half of respondents mentioned how challenging it is to adhere to financial reporting standards like ASC 606 and IFRS 15, while also ensuring compliance with audit requirements. 

ASC 606 has introduced compliance complexity by requiring companies to take a more principles-based approach to revenue recognition, rather than relying on industry-specific guidance. While the 5-step model aims to provide uniformity in revenue reporting, it also introduces judgement-based decisions that can lead to inconsistencies and increased compliance burdens. Companies must carefully evaluate contract terms, estimate variable consideration, and determine the appropriate timing for revenue recognition—all of which require significant judgment and documentation.

  • ASC 606

    Accounting Standards Codification 606 (ASC 606) is a set of accounting principles that outlines how revenue from customer contracts should be recognized and reported in financial statements. It was issued by the Financial Accounting Standards Board (FASB) in May 2014 and is part of the Generally Accepted Accounting Principles (GAAP) in the US.

  • IFRS 15

    International Financial Reporting Standard 15 (IFRS 15) was issued by the International Accounting Standards Board (IASB) in May 2014. It replaced IAS 11, IAS 18, IFRIC 13, IFRIC 15, IFRIC 18, and SIC‑31. IFRS 15 is a global accounting standard that outlines the principles for recognizing revenue from customer contracts.

The complexity involved in interpreting and applying these standards to their unique business processes often leads to issues:
  • “Ensuring that the various entities comply with IFRS 15 framework and providing an easy way of testing the transaction to ensure compliance.”

     

    –CFO at a 1,000-5,000 employee IT Services company

  • “Automation in order to have the complete Order-to-cash process, including Rev rec, according to ASC-606.”

     

    –CFO at a 1,000-5,000 employee SaaS company

  • “The new revenue recognition requirements are more subjective than they have been in the past.”

     

    –CFO at a 1,000-5,000 employee  SaaS company

Managing Non-Standard Deals and Contracts: 

Non-standard deals and contracts—which often appear necessary to close business—greatly complicate revenue recognition processes. 

Maybe that aligns with incentives for Sales, but it leads to headaches for Finance and Accounting teams. 

Custom contracts require:

  • 1) considerable effort to navigate the revenue impact, and 
  • 2) significant time investment to educate Sales and Account Management teams on the impacts.
  • “Analyzing each new contract and change order for deviations from standard forms. Educating salespeople and account managers on revenue impacts.”

    -CFO at a 200-500 employee SaaS company

  • “The biggest challenge in managing rev rec is the number of non-standard deals that appear necessary to close business.”

    -CFO at a 500-1,000 employee SaaS company

  • “Delineating between different types of revenues that require different types of revenue recognition and related timing.”

    -CFO at a 200-500 employee SaaS company

Systems and Process Delays: 

 

As much as we’d all love our workflows to… well… flow, Revenue Recognition is often a major culprit in delayed financial reports and statements. Systems-related delays, particularly in getting customers into billing systems or synchronizing different sources of data, can create a lag in recognizing revenue.

  • “We struggle with a lag between hooking up customers and getting those customers into our billing system.”

    -CFO at a 200-500 employee Media and Publishing company

  • “Getting all the sources of our revenue to a place that we can trust them. We have different data points coming from different systems/people.”

    -VP of Finance at a 1,000-5,000 employee SaaS company

  • “Timing of bookings, timing of start date of contract, unforecasted churn, and incorrect deal structuring leading to inefficient revenue accounting.”

    -CFO at a 500-1,000 employee SaaS company

What’s the Hold Up? Bottlenecks in the Workflow

To get a bit more granular in terms of revenue recognition pain points, we asked our set of Finance leaders if there were specific bottlenecks or frustrations in their current revenue recognition workflow.

Nearly all of them had at least one significant blocker. Any of these sound familiar?

  • Over half (53%) said their manual processes, like data entry and reconciliation, can slow down operations and increase the risk of errors.
  • 38% mentioned that complex deal structures and extensive review processes often delay decision-making and slow down their workflows.

About one-third (31%) said challenges with data quality and integration across systems make it difficult to synthesize data for effective revenue recognition and analysis.

The Implications of Revenue Recognition Issues

The stakes are high in these situations, especially for growing companies. Management and investors are upping the scrutiny on revenue reporting. Audits and compliance are expensive. Revenue accuracy and efficiency are an absolute must-have. 

It’s easy to make vague statements like “Revenue recognition has major implications.” But what does that mean practically? How do the biggest revenue recognition challenges impact the day-to-day workflow, reporting accuracy, and compliance of Finance teams?

Here’s what Finance leaders had to say:

  • “Workflows can be disrupted and accuracy impacted if protocols are not closely followed.”

    – VP of Finance at a 500-1,000 employee Building Materials Manufacturing company

     

    More than half of respondents (54%) mentioned that their revenue recognition challenges often lead to increased manual interventions and time delays in the workflow, affecting the team’s ability to meet deadlines and maintain a smooth financial reporting cadence.

    Wide-ranging business models—from subscription revenue to usage-based billing and everything in between—are only increasing revenue recognition complexity over time. Continuing to manually handle these intricate processes is risky business.

  • “The team gets pulled into last minute fire-drills, forecasting accuracy is low, and reporting is after the fact.”

    – CFO at a 500-1,000 employee SaaS company

     

    38% of the Finance leaders we spoke to said their revenue recognition challenges can lead to inaccurate forecasting and reporting, and 31% worry about the potential volatility in this area if they fail to recognize revenue accurately. The root cause? Anything from dealing with complex revenue structures to non-standard transactions.

  • “We are a public company, so if we have an inaccurate reporting of our revenues, we could face fines, penalties, and restatements of our public reports.”

    – CFO at a 200-500 employee Media and Publishing company

     

    About one in three Finance leaders (31%)—across both public and private companies—said their revenue recognition workflow issues can lead to compliance risks and audit adjustments. Half of respondents (48%) explicitly pointed out the audit and compliance risks of inaccurately recognizing revenue: Audit adjustments, adverse opinions, fines, penalties, and delayed filings in financial statements.

CFOs Build Their Ideal Revenue Recognition Solution

Revenue recognition is a critical yet complex area for CFOs, as the previous pages have highlighted. And as standards like ASC 606 and other compliance requirements continually evolve, the pressure on CFOs to comply and ensure accurate and transparent financial reporting will only increase.

The stakes couldn’t be higher and the challenges are numerous. So, we asked our batch of Finance leaders to sketch out their optimal revenue recognition solution. 

What would they tackle first?

  • Improved automation & seamless integration

     

    “An automated way to detect variations from standard forms of contracts and record them automatically in a system.”

    – CFO at a 200-500 employee SaaS company

  • More effective procedures and standardization 

     

    “Creating one source of truth to drive the process along the way for our teams.”

    – VP of Finance at a 1,000 -5,000 employee SaaS company

  • Enhanced data management and real-time processing

     

    “Having a tool where deal inputs can reflect near real time impact to revenue recognition.”

    – CFO at a 500-1,000 employee SaaS company

How Would They Prioritize?

Simplify Complex Revenue Recognition
with RightRev

The revenue recognition pain points for Finance leaders can be intimidating: Compliance and audit challenges, non-standard deals, systems and process delays from a lack of automation…

At the same time, Finance leaders have understandable doubts and hesitations about buying revenue recognition software. We get it—no one wants to spend time or resources on a fix that won’t work (or scale). That’s where RightRev comes in. 

What are your main doubts or hesitations when buying revenue recognition software?

  • 46%

    Complexity of implementation & integration

    RightRev is one of the fastest solutions to implement on the market. Using our pre-built templates and migration tables, some customers have gone live in just 4-6 weeks.

  • 38%

    Cost & return on investment (ROI)

    The costs of non-compliance and performance inefficiencies far outweigh the cost of an annual software subscription. Instead of throwing more headcount at the issue, managing revenue recognition manually, and fixing errors, invest in the right tool – RightRev – so you can free your existing headcount to focus on higher-impact activities and more rewarding projects.

  • 31%

    Ability to handle complex revenue models

    Good news here… RightRev was made to handle complex revenue. Our customer base speaks for itself: Leading accounting teams at companies like Snowflake – who are pioneers in the consumption business model – as well as Epicor, S&P Global, Morningstar, and CDK Global trust RightRev to handle their complex revenue and high-volume needs.

With RightRev, revenue recognition is not just a compliance requirement—it’s a strategic advantage. RightRev helps mid-market companies navigate the complexities of modern revenue management with confidence, agility, and precision. By leveraging revenue automation, accounting is no longer a bottleneck, but an enabler of strategic decision-making, operational efficiency, and sustainable growth.

Remember that list of the top priorities in a revenue recognition solution? RightRev checks all the boxes (and more). 

  • Real-time visibility
  • Minimal implementation effort
  • Out-of-the-box integrations
  • Variety of use cases solved
  • High-volume data processing

RightRev is rated among the top solutions on the market and is the revenue recognition software of choice for companies like Epicor, Snowflake, and Drata. 

 

Whether you’re preparing for an IPO, managing diverse business models, or striving to improve operational efficiency, RightRev is a proven leader in the market to help you achieve your goals.

The future of accounting is automated… will you be ready for what’s next?

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