A marketing agency needed revenue accounting assistance: A Case Study The client’s chief financial officer and senior leadership were experiencing issues getting accurate, timely financial information due to the various revenue contracts and the volume of projectrelated revenue. The company was approaching their year-end reporting as well as their audit and needed to ensure that the revenue recognition methodology was accurately capturing the correct amounts of revenue in the appropriate periods. The projects and contracts needed to be reviewed for proper cutoff and to determine how much revenue was to be recognized, deferred, or unbilled at year end. Once the analysis was done for the year end, a routine process needed to be established for timely monthly revenue recognition on an ongoing basis. 01
CLIENT: Media group offering marketing, research, and data science. CLIENT’S GOALS: BPO - Outsourced Finance Operations, Revenue Recognition, Project Accounting, Period-End Close OUR TEAM’S ROLE: Citrin Cooperman’s team provided industry knowledge and best practices for revenue recognition, project-level accounting, and improved accuracy and timing of period-end close TOOLS: NetSuite, HubSpot, MuleSoft
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Challenges
Citrin Cooperman’s Approach
Results
• Managing multiple projects with varying terms, deliverables, and contract length
• Reviewed contracts to identify key elements needed for revenue recognition
• Reported accurate year-end revenue for management’s review and forecasting
• Lack of knowledge on ASC 606 and applying revenue recognition to project-based work
• Aligned revenue recognition with current GAAP standards to ensure accurate revenue amounts were recognized in the correct periods
• Documentation of detailed processes and workpapers to be used in month-end close and audit support
• Created standard operating procedures (SOPs) documenting the period-end process and made recommendations for improvement
• Reduced month-end close by 15 business days
• Manual processing of period-end revenue resulting in errors and delay of close • Lack of documentation of period-end processes and review procedures • Cash flow issues related to timing of client invoicing versus vendor payments
• Implemented process to compare revenue earned to client billings and vendor spending
• Improved cash flow by identifying projects that were severely underbilled
"Citrin Cooperman" is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serve clients’ business needs. The two firms operate as separate legal entities in an alternative practice structure. Citrin Cooperman is an independent member of Moore North America, which is itself a regional member of Moore Global Network Limited (MGNL).