This thanksgiving, be grateful for VSOE software

Be thankful we don’t do accounting with an abacus anymore. Courtesy of

Happy Thanksgiving! Today is a day for giving thanks and recognizing the blessings of life. At Bi101, we would like to join in the tradition of thanksgiving and recognize something that does not ever receive the credit or the thanks that it deserves – VSOE Software.

Some of you may be surprised by this, but let me explain why VSOE software deserves recognition around the Thanksgiving table this year.

Improve Productivity

When tracking and calculating VSOE compliance in a spreadsheet, the month-end close processes can take weeks. This is primarily because of the numerous manual processes involved in performing the calculation. First, finance personnel have to access the sales database and download all of the invoices for the month. Next, they have to separate each element within the spreadsheet. Some companies make this step even more complicated by separating each element into different regions or customer types. Last, the bell curve is created and the sales data is evaluated to determine whether VSOE is maintained.

With VSOE software, the entire process is automated and performed by the system. This reduces the cost of calculating, recording, and reporting revenue recognition. The month end close can occur in days rather than weeks.

Improves Accuracy

When companies use spreadsheets to perform VSOE calculations, they do so at their own risk. If finance personnel are not careful, they may miss key a formula or forget to include a row in the calculation.

Again, VSOE software eliminates these dangers. The calculations are performed by the system which dramatically reduces the amount and frequency of errors while increasing the strength of the compliance process.

On Demand Reporting

Occasionally, senior managers or auditors may request reports over VSOE compliance. Finance departments not using VSOE software have difficulty producing these reports on demand with the latest sales information, unless they are given a long lead time.

However, companies that are using VSOE software can produce on demand reports as required and with the latest sales figures. And with software like NetSuite, management can gain insight into compliance by region, customer, or product line.

Compliance Updates

Companies that use VSOE software in the cloud gain another advantage – Automatic compliance updates when rule changes occur. Software in the cloud is more nimble at responding to changes in revenue recognition rules. For example, in 2009, EITF 09-03 changed the revenue recognition rules on multi-element arrangements to include fair value determination according to estimated selling price and third party evidence. Companies that relied on spreadsheets had to adjust their formulas and calculations manually. Companies on VSOE software in the cloud were automatically updated to receive additional support for these new tracking methods.

Thanks to VSOE software, accounting personnel will be able to sit down and enjoy a nice turkey meal with their family. Alternatively, those that are still using spreadsheets may be furiously working through the holiday to prepare for the upcoming month end close process.

Spreadsheets can wreck havoic on revenue recognition calculations

Pretty isn’t always better.  Courtesy of

If you want to enjoy Thanksgiving with your family rather than stare at spreadsheets, please contact us.