This topic explains how Zuora uses a billing-based order-to-revenue model for prepaid commitment, where billing documents trigger revenue recognition and govern how prepaid commitments are billed and recognized.

Zuora uses a billing-based order-to-revenue model for prepaid commitment. In this model, billing documents serve as the trigger point for downstream revenue recognition, linking invoice generation, prepaid commitment activity, and service charges into a single, coordinated flow.

The following rules apply to the order-to-revenue billing-based model for prepaid commitment:

• Billing documents are the trigger point for revenue recognition. Revenue is not recognized until a billing document is generated.

• Prepaid commitments generate standalone billing items at billing time. These items are independent of the service charge lines on the invoice.

• Revenue is recognized based on the billing documents generated during billing doc posting.