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Has anyone figured out how to start revenue recognition before invoicing?

Valued Scholar

Has anyone figured out how to start revenue recognition before invoicing?

Hi Community,

 

I have a question on the best way to create a revenue schedule for a trial period.

My scenaio is as follows, I have a 15 month subscription, the first 3 months is free (trial period), from the 4 th month i send the customer an invoice. Now my requirement is to show a uniform revenue schedule for the 15 months, which is the total invoice value for the 12 months divided by 15.

For eg. If i charge a monthly billing for $1000 for 12 months, my revenue schedule should show $1333.33 for all 15 months. How is this possible in Zuora?

3 REPLIES 3
Valued Scholar

Re: Has anyone figured out how to start revenue recognition before invoicing?

Hi, I believe my figures in the example are incorrect with regards to the description, I would like to correct it here -

My example subscription is as follows -

If i have a subscription for 15 months, with the first 3 months being on trial period, and I invoice the customer for $1000 from the 4th to the 15th Month. I would like to view have a revenue schedule for this show up as $800 from month1 to month 15. Is this possible through any custom revenue rule?

Zuora Support Moderator

Re: Has anyone figured out how to start revenue recognition before invoicing?

@Bharath - 

 

This may be what you're looking for: 

If you're looking to recognize the whole amount that would be invoiced for in 12 months ($1,000/month x 12 = $12,000) and have that distributed out across 15 months ($12,000/15 = $800/month) then you may be looking at the Unlimited Recognition Model. Using this model, you'll be able to create a revenue schedule from the subscription charge level without needing to wait for invoice generation.

 



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Valued Scholar

Re: Has anyone figured out how to start revenue recognition before invoicing?

Hello Amy,

 

Thank You. Yes this solution is good.

The one thing I want to ask here is this -

 

1. You mentioned the Manual Rev Rec Rule. I believe this is also called the Unlimited Rev Rec Rule, is that right?

2. this rule also let me define any amount and distribute that over the coming accounting periods. 

 

From Zuora stand point, is this ok? I mean will it break anythig in the Finance or revenue reports or will it show some mismatch in numbers?

 

Especially if for example my Invoice is only $1000 which I generate later, but before i post an invoice if i Distribute a Revenue that I manually entered as $1500 using this method?

 

I would just like to know what can be the problems?

 

Thanks

Bharath