Costs to Fulfill a Contract

The ASC 606 Standard

Direct costs incurred to satisfy a performance obligation that generate resources used in the future, which must be capitalized. They align the recognition of massive upfront expenses with the timing of the associated revenue.

The Real-World Scenario

You spend $40,000 on engineering labor to build a custom software integration for a client before their multi-year subscription officially begins.

The Spreadsheet Breaking Point

Manually pulling engineer timesheets to calculate the direct labor cost of custom software setups is an excruciating month-end task.

The Hidden Cost to the Bottom Line

Failing to capitalize fulfillment costs means you take a massive, unnecessary hit to your gross margins before revenue even begins.

How GAAPX Eliminates the Risk

Integrates with project management tools to automatically track labor inputs, capitalize the costs, and amortize them against project revenue.