Zuora Finance: Manage recurring revenue

Revenue Recognition determines when revenue can be recognized for a service. Revenue recognition follows the basic principle that revenue can be recognized when a service has been provided and when you are likely to receive payment for that service. Here's a video on Revenue Recognition in Zuora.

To know about how recognizing revenue in a subscription business model introduces new challenges and the solution Zuora Finance offers, see Automated revenue distribution.

Key features

Revenue Recognition offers:

• Revenue schedules auto-created on single charges.

• Subscription-aware revenue recognition.

• No manual effort to handle changes to subscriptions.

• Flexible revenue rule models that you can configure to fit your business model and accounting practices.

• Manual distribution to handle ad-hoc adjustments to revenue schedules, such as adjusting the revenue schedule for milestone-based professional services.

• Accounting metrics calculated on the revenue schedule include: recognized revenue, deferred revenue, and revenue backlog (pending revenue).

• Revenue Workbench to help you manage undistributed revenue on subscription charges.

• Data source export to handle your revenue recognition reporting needs. See the following data sources:

  • Revenue Charge Summary Item

  • Revenue Event Item

  • Revenue Schedule Item

  • Revenue Schedule Item Invoice Item

  • Revenue Schedule Item Invoice Item Invoice Adjustment

• Accounting Period Revenue Detail report to export revenue data for accounting close or auditing purposes.

• Zuora Finance roles and permissions to restrict who manages revenue schedules and rules.

• REST APIs are used to implement the most complex revenue recognition scenarios. The following REST API resources are available:

  • Charge Revenue Summaries

  • Revenue Events

  • Revenue Items

  • Revenue Rules

  • Revenue Schedules

  • Settings

Common scenarios

Common scenarios of revenue recognition include:

• Billing-based policy: Revenue is recognized upon sending the invoice, which is a billing-based policy. For example invoicing $300 for January through March results in $100 of revenue recognition for each month in the three-month period. A delay in recognition could occur, such as when payment receipt is past due or service activation date is pushed out.

• Custom revenue schedule: Any number of custom scenarios where you would like to have complete control over your revenue recognition.