The revenue hold is to prevent future revenue release. This type of hold can be applied after the revenue is partially released. When the revenue hold is applied, it will be applied to both revenue and allocation. The transfer hold is to prevent the revenue schedules from being posted to the upstream system.
In this month’s Revenue Table Talk, after a tool tip on enhanced error messages, we discussed the benefits of effectively using holds and approvals to help improve your daily operational process.
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In-depth Look at Revenue Holds
Revenue holds are used for various reasons, including pending deliveries, collection issues, and data inaccuracies. Zuora Revenue now offers detailed setups for different types of holds, such as Transfer Holds, which prevent the posting of journal entries, and Custom Defined Holds, which allow for bespoke business needs. Users can apply holds at different levels—RC, POB, or Line—depending on the specific requirements. Watch video to learn more.
Holds Setup
Click on each to learn more.
- Type of Holds: Revenue, Transfer, and Custom-defined
- Hold Levels: RC Level, POB, and Line
- Group Criteria: Example on how to create a hold on all RCs that are greater than $500K TCV. Note that any contract modifications after the release of the hold will reapply if TCV is >$500k.
- Reason Code: To setup standard reason code for the company.
Holds on Zuora Revenue
The following covers different pages in Zuora Revenue to identify the holds applied. Click on each to learn more:
Business Scenario Examples
Revenue Holds - Watch video to learn more
- Software Company A delivered subscription license with installation.
- Company A cannot take revenue on the Revenue Contract earlier of installation completion or 3 months from date of delivery
Transfer Holds - Watch video to learn more
- Software Company A sold and delivered a subscription license. During negotiation, the customer deemed that additional purchase would be done if the price is right within 3 months.
- Company A deemed contract is not completed until 3 months time after the date of delivery. Hence, the contract is in Initial Contract Modification Period where SSP allocation is not finalized.
Common Use Cases
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Pending Delivery
- Revenue Holds will be automated to look for Product Type. Upon data collection, the hold will be placed.
- Release Event and/or expiry will be used for releasing revenue.
Checklist Review
- Revenue Holds will be automated to look for aggregate sum of ext sell price. Upon data collection, the hold will be placed.
- Allow Manual Release/Apply will be set to Y so that End User can apply/release the hold when deemed appropriate
Collection Issues
- In the middle of the contract, Customer A experienced collection issues. To avoid over recognizing of revenue, Transfer Holds are manually placed on all related RCs.
- Upon confirmation of collection of payments, end user to manually release the holds.
- This can also be done with Mass Actions for applying and releasing the Hold.
Data Issues, Pending Upstream Updates
- In the middle of the contract, End User noted that upstream data is corrupted, causing inaccurate Revenue. Request has been made to upstream team to correct the data
- To avoid inaccurate revenue recognition, Transfer Holds are manually placed on the RC.
- Once data is corrected, the end user can manually release the holds.
Corner Cases of Holds
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Case #1:
- End user deferred the revenue, before allowing the deferring journal entries to post to GL, he/she placed a transfer hold.
- When reviewing the GL posting, End User noticed that the deferring entries never made it to GL, hence overstated revenue.
- If deferral happens during the month, create the GL Transfer batch for the RC and Transfer before hold is placed.
Case #2:
- End user deferred 70% of a Upon Booking POB, placed Revenue Hold to hold off further release of revenue.
- SO update for term change is blocked due to revenue is already released. End User released hold and deferred the remaining revenue to allow collection of term change.
- When SO update is collected, due to Upon Booking setup on POB, system released 100% of the revenue.
- If the End User deemed the system 100% release is incorrect, he/she needs to perform the manual process again.
Case #3
- End user placing Revenue Hold on 100% released RC/POB/Lines.
- In this case, the Revenue Hold is no longer effective. End User needs to determine if Transfer Hold is proper action or deferral is required before hold is applied.
Case #4
- Revenue Hold is applied on a partially released Upon Booking/Upon Billing based POB, if there is a price change to the SO, revenue will not be updated if the attempted update price is lower than the released amount.
Case #5
- Revenue Hold is applied on a partially released Event-based POB with retain % setup. If there is a price change to the SO, revenue will true up to the percentage before the SO update if the attempted update price is lower than the released amount.
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