Case Study: Fixing Deferred Revenue & POC Projects in Flight Restoring Accuracy, Control & Confidence in Financial Reporting

The Challenge

A cybersecurity services company was closing the books and seeing deferred revenue balances climb without a clear explanation.

The numbers didn’t add up.

Financial reporting required increasing levels of manual adjustment. Leadership lacked clear visibility into what was driving the numbers. In one instance, the organization identified millions of dollars in deferred revenue without a clear explanation. The issue was not tied to a single transaction or project. It was systemic. At its core, the challenge stemmed from gaps in data, process, and system usage.

Revenue recognition in POC environments depends on having a complete and accurate view of each project – when revenue is earned, when it should be recognized, and how it aligns to project completion milestones. Without that full picture, the system cannot apply revenue recognition correctly.

Without proper data, the full story wasn’t there to determine how revenue should be recognized.

At the same time, the organization was not consistently using the system to manage these processes. Instead, teams relied on spreadsheets to track revenue and used journal entries to adjust results within the system. These adjustments were intended to align outputs with expectations, but over time they created discrepancies, particularly in deferred revenue balances.

While the P&L appeared correct, the underlying data did not align.

The result was a growing gap between reported outcomes and system integrity.

The Solution

Altum approached the situation by first identifying the root cause of the discrepancies.

Rather than attempting to address all issues at once, the team began by focusing on a subset of projects where the discrepancies were most significant. These “problem” projects were analyzed in detail to understand what had gone wrong and to identify patterns across them.

This process resembled forensic accounting. The goal was to look for similarities and understand where things went wrong, rather than simply addressing symptoms.

Through this analysis, Altum identified a combination of issues:

• Incomplete or inconsistent data
• Misalignment between project status and revenue recognition
• Reliance on manual processes outside the system

With these root causes identified, the focus shifted to correction and stabilization.

Altum worked to realign the system with the underlying business processes, ensuring that revenue recognition rules were applied correctly based on accurate data. This included adjusting entries where necessary to correct deferred revenue balances, while preserving the integrity of financial reporting.

At the same time, the team addressed the process.

Rather than continuing to rely on spreadsheets and manual journal entries, the organization was guided to use the system as designed. This required reinforcing trust in the system and eliminating workarounds that had developed over time.

These issues often stem from not following the defined process and instead creating workarounds to achieve a specific reporting outcome.

The effort was not limited to correction. It also required aligning people, process, and technology to ensure that the issues would not recur.

The Outcome

Once corrected, the impact was immediate.

Financial reporting became more accurate and consistent: Deferred revenue balances aligned with underlying project data. The month-end close process improved, with teams able to reach accurate numbers more quickly.

Improvements in accuracy and efficiency are often visible within the first few close cycles once issues are resolved.

Just as importantly, leadership confidence was restored.

With clearer visibility into financial performance and stronger alignment between systems and reporting, the organization was able to make decisions based on reliable data.

The engagement reinforced a key principle in finance transformation. When data, process, and system usage are misaligned, issues compound over time. And, when they are brought back into alignment, accuracy and efficiency follow quickly.