A majority of public companies are unable to finalize their revenue numbers on time, according to a new survey.
Fifty-seven percent of the senior financial executives polled at 578 companies reported that they made adjustments after the books were officially closed. The survey was conducted by RevenueRecognition.com and IDC, and sponsored by Softrax.
Revenue numbers are being readjusted up to three weeks after the official monthly close, mainly because transactions are becoming more complex and the revenue accounting data is not available in time, according to the survey's authors. Financial personnel often require more time to review contracts and apply the proper accounting guidelines. However, they often don't receive the necessary information in time.
The most difficult areas for establishing effective internal controls are in contract management and spreadsheet-based reporting.
"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, a research director at IDC, in a statement.
