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Accounting Advisory Firm Blythe Leading the Way in Revenue Recognition Services

March 21, 2018 –

Irvine, CA – Blythe Global Advisors, a leading Orange County accounting advisory firm, is in the forefront of helping companies implement the new guidelines around revenue recognition services. With its directive for a single worldwide standard for reporting revenue, the new guidelines represent one of the biggest accounting changes in years and have turned accounting on its ear.

 

Experts in the finance and accounting reporting world all agree that because the rule’s requirements will impact companies’ systems, processes and culture, successful implementation depends on a depth of professional knowledge that most companies don’t possess and that audit firms are restricted from offering.

 

As an early provider of professional services for the new rule, Marc Blythe, president of Blythe Global Advisors, has observed best practices emerging from early implementers – the first of which is adopting updated processes to ensure an accurate estimation of the impact of the converged standard on revenue results.

 

In Marc’s view, many companies are glossing over the new rules and coming to quick conclusions regarding material impact – usually coming down on the side of little or no materiality. The new rule requires deeper analyses of key drivers including:

 

  • Revenue streams – activities that might not have been significant in the past that could be very significant under the new rules.
  • Deferred revenue – issues including large amounts of deferred revenues that will likely be reported on an accelerated basis going forward and/or previously deferred monies that might never be reflected as revenue – either of which could look like “holes” in results and cause perception problems among shareholders and other stakeholders.
  • Business changes – the kinds of normal, incremental changes that occur over time outside the realm of requirements that might have reached a cumulative point of materiality and now must be included in regular reports accompanied by documentation, analyses, judgments, etc.

 

Given the above circumstances, the most important action companies can take is to ensure their revenue recognition practices are adequate to their current business model and revenue streams. In response, many accounting advisory firms (of which Blythe is one) have developed updated best practices to help companies identify the activities and associated revenue streams that are material under the new rule. For its part, Blythe Global Advisors offers a four-phase service that starts with a detailed impact assessment and strategy which examines each revenue stream and its associated processes, policies, etc. and then moves on to implementation, year-end close and maintenance phases.

 

According to Marc, because the new rule is really complicated, it has tentacles that reach beyond the accounting and financial functions into IT, sales, procurement, facilities, investor relations, human resources, etc. Development of upgraded, bulletproof practices and processes along with the enhanced skills necessary to deploy them is a steep curve. In short, companies will need outside help.

 

Marc’s first piece of advice is for companies to call a trusted accounting advisor who has a proven history of helping clients resolve revenue recognition issues. If they’ve updated their practices to ensure the identification of issues that are material under the new rule, they can most likely continue to help companies comply accurately and on time.

 

About Blythe Global Advisors

 

Blythe Global Advisors is a full-service accounting advisory firm located in Irvine, CA that helps companies of all sizes meet their reporting obligations by filling the gap with their accounting and financial standards expertise. With extensive Big Four experience in all areas of accounting and financial reporting, Blythe Global Advisors offers a broad range of sophisticated, customized, affordable solutions and services to help companies prepare successfully for audits, upgrade the human and technical competency of their accounting and financial infrastructures, make investment decisions with confidence, and convey their companies’ true value to external and internal stakeholders. It ranks number 10 on OC Business Journal’s 2017 Management Consultants List.

 

About Marc Blythe

 

As president of Blythe Global Advisors, Marc Blythe brings more than 25 years’ experience advising companies of all sizes across all industries on their accounting and financial reporting requirements. Prior to forming Blythe Global Advisors, Marc was an audit partner at EY.

 

For more on Blythe Global Advisors, check them out at www.blytheglobal.com or contact them at 949-757-4180.

 

Orange County Accounting Advisory Firm Leads in Implementing Revenue Recognition

May 16, 2018 –

Blythe Global Advisors Says Companies are Underestimating the Impact of the New Worldwide Revenue Recognition Standard on People and Processes.

 

As a leading Orange County full service accounting advisory firm, Blythe Global Advisors continues to be in the forefront of helping companies implement the new revenue recognition rule. With its directive for a single worldwide standard for reporting revenue, the new rule represents one of the biggest accounting changes in years. It has turned accounting on its ear.

 

During its engagements helping early implementers of the new rule, Marc Blythe, president of Blythe Global Advisors, says that both clients and auditors are underestimating the amount of work and level of commitment a compliant implementation will require. Here are two of the scenarios Marc and his team have observed.

 

  • Lower-level delegation of a strategic imperative

    Many businesses are delegating responsibility for developing what is essentially a mission-critical imperative to earnest but less experienced staff. When revenue recognition experts arrive for initial meetings, the result is conversations that only scratch the surface of requirements. The new standard impacts systems, processes and culture. It affects results depending on companies’ legacy reporting procedures and the contractual framework within their respective industries. A comprehensive implementation needs to get down to the nuts, bolts and studs of the business and then needs to be followed up with a companywide plan to change and adapt every affected policy, procedure and process.

     

    Put another way, successful implementation of the new rule needs to start with the right decision makers/change managers – the CFOs, controllers and senior accounting and finance managers who hold the following keys to successful implementation:

    • The experience to understand the full scope of the new rule’s potential impact on strategy and business results.
    • The knowledge to decide how the company will proceed – whether on a prospective, retrospective or modified basis.
    • The portfolio to marshal the necessary resources.
    • The power to make things happen quickly across business units, functions, etc.

     

  • Failing to Anticipate the Impact on Internal Controls

    Blythe Global Advisors is finding that even those companies that are making committed efforts to upgrade processes are getting caught short when it comes to the impact of the new rule on their previously best-of-breed internal controls. The requirements of the new rule increase the chances of internal controls deficiencies rising to a level of material weakness – which would require communication to shareholders.

     

    In response, companies need to re-evaluate their internal controls for proper revenue recognition. Just as the bar for complying with all of today’s rules and regulations is constantly rising, companies should be ready for cascading changes once the new revenue recognition rule is fully implemented. When it comes to internal control processes and practices, best-of-breed with regular stress tests is mandatory.

     

    As for the people who staff internal controls, both public and private companies need to employ highly skilled professionals. That means people with sufficient knowledge of accounting rules to recognize when new activities affect revenue recognition or to discern the tipping point when the business model has shifted significantly enough to warrant changes to accounting treatment.

     

    Put another way, to ensure internal controls are compliant, companies need to develop an implementation plan that’s as deep and as it is broad – examining the impact of the new standard on the entire organization.

 

According to Marc, the impact of the new rule goes beyond accounting and financial functions into IT, sales, procurement, facilities, investor relations, human resources, etc. Development of upgraded, bulletproof practices and processes along with the enhanced skills necessary to deploy them is a steep curve. Successful implementation depends on a depth of professional knowledge and resources that even most larger companies don’t possess and that audit firms are restricted from providing. In short, companies will need outside help.

 

Marc’s first piece of advice is for companies to call a trusted accounting advisor who has a proven track record of helping clients resolve revenue recognition issues. If they’ve updated their practices under the new rule, they can most likely continue to help ensure compliance.

 

About Blythe Global Advisors

 

Blythe Global Advisors is an Irvine full service accounting advisory firm that helps companies of all sizes meet their reporting obligations by filling the gap in accounting and financial expertise. With extensive Big Four experience in all areas of accounting and financial reporting, Blythe Global Advisors offers a broad range of sophisticated, customized, affordable solutions and services to help companies prepare successfully for audits, upgrade the human and technical competency of their accounting and financial infrastructures, make investment decisions with confidence, and convey their companies’ true value to external and internal stakeholders. It ranks number 10 on OC Business Journal’s 2017 Management Consultants List.

 

About Marc Blythe

 

As president of Blythe Global Advisors, Marc Blythe brings more than 25 years’ experience advising companies of all sizes across all industries on their accounting and financial reporting requirements. Prior to forming Blythe Global Advisors, Marc was an audit partner at EY.

 

For more on Blythe Global Advisors, check them out at www.blytheglobal.com or contact them at 949-757-4180.

 

Orange County Accounting Advisory Firm Weighs in on New Lease Accounting Rule

July 9, 2018 –

Blythe Global Advisors Says Delaying implementation of the New Lease Accounting Standard Risks Significant Consequences to Financial Results and Stakeholder Confidence.

 

Irvine, CA – Blythe Global Advisors, a leading Orange County full-service accounting advisory firm, is in the forefront of helping companies implement the new lease accounting rule. With multiple engagements under its belt, Marc Blythe, president of Blythe Global Advisors, is concerned that companies are risking significant unintended consequences to financial results by not restructuring leases quickly enough, so they continue to support company goals.

 

The central tenet of the new lease accounting rule requiring that substantially all leases be recorded on the balance sheet means businesses will need to revamp how they negotiate leases and how they report them. More management judgments will be required to arrive at accurate values of every lease’s asset and liability and, again, more detail as to how numbers were arrived at. When audit firms enter the picture, the opportunity to structure leases that optimally support company goals will have passed.

 

In Marc’s assessment, delaying implementation will make it difficult to determine the impact on primary financial metrics or to communicate the company’s anticipated value to prospective buyers, bankers, investors, etc. – making the barriers to entering a merger, acquisition or IPO much higher. With regard to IT investments, companies that delay implementation will render portions of their IT investments useless. Using manual processes can work for a short time but are ultimately inefficient and prone to errors – causing lots of rehabilitative work once the upgraded systems are deployed.

 

In order to mollify some of the fallout from delayed implementation, Marc stresses the importance of early communications with stakeholders. If the company is not in a position to renegotiate leases, pre-emptive and full communication with stakeholders is essential. Companies that don’t adopt early implementation must manage their messages so that readers of their financial statements understand the true health of the company and future expectations under the new rule. Companies that haven’t yet grown to the point of having in-house communications staff should consider hiring a professional communications consultant. Getting this message right is that important.

 

Because the new leasing rule is so complicated and has tentacles reaching beyond the accounting and financial functions into IT, sales, procurement, facilities, investor relations, human resources, etc., the development of upgraded, bulletproof practices and processes along with the enhanced skills necessary to deploy them is a steep curve. Successful implementation depends on a depth of professional knowledge and resources that even most larger companies don’t possess and that audit firms are restricted from providing. In short, companies will need outside help.

 

Marc recommends that companies reach out to a trusted accounting advisor who has a proven history of helping clients resolve lease accounting issues. If they’ve updated their practices to ensure the identification of issues that are material under the new rule, they can most likely continue to help companies comply accurately and on time.

 

About Blythe Global Advisors

 

Blythe Global Advisors is a full-service accounting advisory firm located in Irvine, CA that helps companies of all sizes meet their reporting obligations by filling the gap in accounting and financial expertise. With extensive Big Four experience in all areas of accounting and financial reporting, Blythe Global Advisors offers a broad range of sophisticated, customized, affordable solutions and services to help companies prepare successfully for audits, upgrade the human and technical competency of their accounting and financial infrastructures, make investment decisions with confidence, and convey their companies’ true value to external and internal stakeholders. It ranks number 12 on OC Business Journal’s 2018 Management Consultants List.

 

About Marc Blythe

 

As president of Blythe Global Advisors, Marc Blythe brings more than 25 years’ experience advising companies of all sizes across all industries on their accounting and financial reporting requirements. Prior to forming Blythe Global Advisors, Marc was an audit partner at EY.

 

For more on Blythe Global Advisors, check them out at www.blytheglobal.com or contact them at 949-757-4180.

 

 

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