For publicly traded U.S. companies, compliance with SOP 98-1 and the Sarbanes-Oxley Act (SOX) is critical. Accurate tracking and classification of internal-use software costs, capitalized vs expensed are essential for maintaining transparent financial reporting and strong internal controls.

Fluid’s Project Time Tracking provides a seamless solution that ensures compliance while empowering finance, PMOs, and auditors with precise cost data and full auditability.

The SOP 98-1 & SOX Challenge

SOP 98-1 sets the accounting rules for internal-use software costs across three stages:

• Preliminary stage → Costs expensed immediately
• Development stage → Costs capitalized
• Post-implementation stage → Costs expensed, except for qualifying upgrades

For SOX-regulated organisations, this creates two key challenges:

1. Correctly classifying time and costs for compliance.
2. Maintaining strong internal controls and audit-ready reporting—especially where sub-ledger (sub-GL) integration is required.

How Fluid Simplifies SOP 98-1 and SOX Compliance

Configurable Capitalization Controls
Administrators can define activity types at the project or task level, marking each as capitalizable or non-capitalizable. This ensures only eligible development work is capitalized, aligning directly with SOP 98-1 requirements and preventing reporting errors.

Intuitive Time Tracking
Fluid makes time entry simple and accurate. Users only see projects and activities relevant to them, ensuring consistent and valid inputs. Features like “copy previous week,” autofill, and real-time validation reduce manual effort and improve compliance.

Automated Approval Workflows
Timesheets flow through customisable approval paths, ensuring validation by the right managers before costs are booked. This enforces SOX-compliant internal controls by providing traceability of every approval decision.

Sub-GL Integration for Accurate Cost Allocation
Approved time entries are automatically converted into financial values using configurable rate cards and mapped directly into the organisation’s general ledger and sub-ledgers. This ensures accurate cost tracking, seamless reconciliation, and improved financial transparency.

Audit-Ready Reporting and Dashboards
Fluid provides live dashboards showing timesheet submission rates, approvals, and financial allocations. Transaction-level exports give auditors full visibility into project costs and compliance status, supporting faster and more reliable SOX audits.

End-to-End Financial Governance
By integrating time tracking with project financials, Fluid provides a single source of truth for project costs, forecasts, and capitalization tracking. PMOs, finance teams, and auditors can manage SOP 98-1 compliance with confidence, backed by complete cost transparency.

Benefits at a Glance

• SOP 98-1 Compliance
  Ensure only eligible development costs are capitalized, with activity-level controls for accurate financial reporting.
• SOX-Ready Internal Controls
  Strengthen governance through automated approvals, audit-ready dashboards, and full cost traceability.
• Sub-GL Financial Accuracy
  Automatically map approved time entries into your general ledger and sub-ledgers, simplifying reconciliation and reporting.
• Streamlined Operations
  Simplify time entry with intuitive interfaces, autofill capabilities, and seamless approval workflows.
• Full Audit Transparency
  Access detailed, exportable transaction-level data and drill-down insights to support both internal and external audits.

Conclusion

Fluid makes SOP 98-1 and the project costing component of SOX compliance effortless by embedding financial governance directly into project time tracking. From capitalization controls to sub-GL mapping and audit-ready reporting, Fluid equips finance, PMOs, and auditors with the data and tools they need to stay compliant—without slowing delivery.