How to set the Conversion date in RevRec?
Scope
What is Conversion in RevRec?
How to run a conversion job in RevRec?
How conversion handles new contracts and historical contracts in RevRec?
Summary
Conversion refers to how you convert from your current ASC 606 accounting process into a new accounting close process that runs on RevRec. Conversion is a process that you run right after you have configured RevRec and must do before you close your first Accounting Period. Navigate from Settings > Configure > Conversion Date.
Solution
- Click Settings > Configure > Conversion Date.
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Click the calendar icon and select your preferred date.
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Click Ok > Continue.
There are a number of decisions/steps to answering how you will perform the conversion, illustrated in the diagram below:
Conversion Population Decision The first step is figuring out what population you want to convert into RevRec. You must decide whether you want to Only bring in New Contracts/Renewals into RevRec and run prior balances off in their current system of record Bring historical contracts into RevRec
New Contracts Only If the customer chooses to bring in new contracts only there are only two steps that need to be performed
Set the Conversion Date. The conversion date tells RevRec to ignore all data that is before the conversion date (this is primarily needed for customers that have an automated data sync process set up that would bring in older contracts if this date was not set). This is available on your environment settings page.
Set the Accounting Period. The accounting period is set to the first open period that you want to book from out of the RevRec system. All transactions that are imported are marked as being a part of this period until the period is closed.
Historical Contracts Once you decide you want to bring in a historical population you have a further set of choices you have to make.
Bring in Historic Active contracts only; this refers to contracts that have closed and are in mid-term and have a current deferred balance on the balance sheet. We refer to this type of conversion as a Prospective Conversion. Bring in a larger historical population including contracts that are not currently active but you would like to include in your calculations as you currently do not have revenue numbers for prior periods and would like RevRec to produce them. We refer to this as a Retrospective Conversion. The population here can be as large as you deem needed (a quarter ago to years ago).
Note that the larger this population the more work you might have to do to reconcile prior ASC 606 results against what is produced by RevRec.
Performing Conversion
Once you have determined your conversion method and know you need to convert historical data you will follow the process above to create a conversion data set and run it.
Building your Conversion Data Set The first step is to determine if you are running an automated sync. If you are connected and run a Sync job learn how. When you run sync jobs in setup mode RevRec will automatically generate a "Conversion Data" set for you in an Excel format that you can download.
This data set is NOT filtered to an active population and instead will include the entire population in the source system of record. You have the ability to download and filter the dataset based on criteria you may deem relevant to determine your initial population.
If you do not have an automated sync connection or if the data set in your current set is incomplete you can use our bulk upload process to prepare a dataset in Excel. Read more about it in our Import Data in Bulk Help.
Run Conversion Job After you have your conversion dataset ready you can go ahead and bulk-load it on the Sync screen and run through it to populate RevRec.
Reconcile and Adjust
Once you have run through RevRec with your historical conversion data you will need to reconcile your prior results against the numbers produced by RevRec. This will include looking at your deferred revenue and commission balances on your GL and comparing them to those produced by RevRec. Once you are comfortable with any difference you will post adjusting entries to your ledger to have it tie back to RevRec as of the conversion date.
Once you have done this your conversion is effectively complete. All you have to do at this point is to Set the Accounting Period. Note that if you wish to not receive any updates to prior contracts from your source system at this point you can still set the Conversion Date and RevRec will ignore future updates on these contracts. We recommend you not set this unless you know that changes to this population need to be out of scope.
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