Revenue Management: #3 Revenue Recognition Simplified

Revenue Management: #3 Revenue Recognition Simplified


In continuation of the previous post on how to compute revenue recognition, let's explore a solution that helps businesses handle real-world complexities. While the Accounting Standards provide a clear framework for recognizing revenue, the real challenge lies in implementing that guidance in daily practice. Managing multiple contracts, bundled offerings, and varying billing models can quickly complicate things and delay financial reporting.


To bridge the gap between the guidelines and the actual business routine, you need a tool that can automate the entire process. Zoho Billing brings the five-step model to life through its full-fledged, automated revenue reporting. 

Zoho Billing flexes into Revenue Recognition reporting by adopting the Accounting Standards of IFRS 15 and ASC 606. With Zoho Billing, one can define when and how revenue can be recognized. Its reporting provides businesses with a detailed breakdown of when revenue is recognized, when it is kept as deferred, and its projections.


What do you configure?

In Zoho Billing, you can define a  "Recognition Rule" where you can create and assign different rules for your services. The attributes, while configuring the rules, are:


Recognition Period:

Define how often you wish to recognize your revenue.

  • Monthly: The revenue will be recognized every month. This is ideal for subscription-based services that offer monthly or weekly renewals.

  • Quarterly: Revenue will be recognized every three months, which aligns with most businesses' standard financial reporting cycle.

  • Yearly: The revenue will be recognized after every year. This is suitable for long-term contracts and high-value payments.

  • Once: The revenue will be recognized once and for all. This is suitable for milestone-based businesses or one-time service deliveries.

 

Recognition Method:

This will help you determine what and how revenue is recognized. For your simple understanding, we will provide one example for each of these recognition methods.

  • Daily: Total revenue is divided over the service period and recognized based on the number of days in the service period.

  • Evenly Distributed: Total revenue is divided evenly across the subscription or recognition period.

  • Evenly Distributed (with Prorated Values): Revenue that is recognized will be prorated based on the start date of the subscription.


Recognition Time:

Businesses need to define when to recognize revenue. You can determine whether revenue is recognized at the period's start or end.

If you choose,

  • Period Start: Revenue will be recognized when the service period begins. Prepaid subscription-based services commonly follow this. In this way of recognition, January's revenue is recognized in January itself.

  • Period End: Revenue will be recognized when the service period ends. This is suitable for contacts who bill quarterly.

These rules ensure that the revenue is recognized automatically and periodically as and when the service is delivered.


What do you get?

Zoho Billing automatically allocates the revenue between Recognized Revenue and Deferred Revenue. Over the contract term, the deferred revenue decreases as recognized revenue increases. The system will auto-generate:


Recognized Revenue Report: This report reflects income from completed performance obligations, providing insights into current financial performance. We have narrowed it down to give recognized revenue by customers as well as items.



Deferred Revenue Report: This report tracks revenue that has been invoiced or received in advance but not yet earned. It highlights liabilities on the balance sheet and represents future revenue to be recognized as obligations are fulfilled.



Revenue Waterfall Report: This report visualizes the flow of revenue over time, showing how deferred revenue transitions to recognized revenue. It provides a timeline of revenue recognition, offering insights into trends and future earnings.



These reports are export-ready and built to support audits and stakeholder reporting.

 

Zoho Billing simplifies revenue recognition by transferring complex accounting standards into practical, automated processes. With configurable rules, flexible methods, and in-depth reporting, businesses can ensure that their recognized and deferred revenue is tracked accurately and transparently. This automated process removes guesswork for a subscription-based model and helps the finance team stay on top of their revenue reporting.


Alert
But automation is not always the answer. In industries that work on projects, they are often tied to irregular milestones and unpredictable timelines. In such cases, automated recognition rules may not fully capture the reality of the project delivery. Guess what! Zoho Billing keeps you covered if you are into such businesses.

In the next post, we will understand the logic behind the Manual Revenue Recognition that Zoho Billing offers. 


    • Sticky Posts

    • Community Learning Series | Digest #5 — September 2020

      Dear customers, We're happy to bring you the September edition of our #CommunityDigest! Keep track of your subscription KPIs right from your smartphone: Last month, we enhanced our Android mobile app to help our customers get daily updates on their business health. We got to know from a lot of customers that this has made their job much more easier because they no longer have to keep a reminder to manually check on the previous day's revenue or activations. If you have not downloaded it yet, here's

    • Community Learning Series | Digest #4 - August 2020

      Dear customers, We hope you're staying safe and healthy. I'm happy to bring you the fourth edition of our #CommunityDigest with some brand-new updates from us. 1. Daily Business Updates (for Android users) The Zoho Subscriptions Android app has got a cool new update: You can now get a push notification to your smartphone that lets you know how many activations and cancellations have taken place, and what's the net revenue for the previous day. The best part is, you can tell the app when exactly you

    • Community Learning Series | Digest #3 - July 2020

      Dear customers, We hope you're staying safe and healthy. We're glad to bring you the July edition of our #CommunityDigest. New community members can view our previous newsletters here. This time, we have two major updates and three interesting topics for you: 1. Zoho Subscriptions Developer Community Since the inception of Zoho Subscriptions, our team believed that the recurring billing platform we provide should be able to offer an extensive API library that empowers businesses to automate most

    • Introducing: Community Learning Series | Digest #1 - May 2020

      Dear customers, We hope you are staying safe and healthy. Helping businesses manage their customer subscriptions more efficiently has always been, and always will be, our goal at Zoho Subscriptions. We strongly believe this is possible if we grow together as a community and share what we know with each other. To nurture this shared learning experience, here is our brand-new Community Learning Series! ​ Welcome to the first edition of our digest! Each edition of our community digest includes guides

    • Recent Topics

    • Tip #48- Power Your AI Workflows with Zoho Assist on Zapier’s MCP- 'Insider Insights'

      We’re thrilled to announce that Zoho Assist is now part of Zapier’s Model Context Protocol (MCP), bringing remote support automation right into your AI ecosystem. What is MCP? The Model Context Protocol (MCP) is Zapier’s new framework designed to connect

    • Insert Cookie Policy in Zoho Sites

      Hello, i need to insert a banner on my site because i'm in Italy so i have to respect EU laws for Cookie Policy and Privacy Policy. I see that i need to insert a code in <head> section of my site to show a banner/popup with cookie info. How i can do this? Thank you Luca

    • Nimble enhancements to WhatsApp for Business integration in Zoho CRM: Enjoy context and clarity in business messaging

      Dear Customers, We hope you're well! WhatsApp for business is a renowned business messaging platform that takes your business closer to your customers; it gives your business the power of personalized outreach. Using the WhatsApp for Business integration

    • Marketing Tip #1: Optimize item titles for SEO

      Your item title is the first thing both Google and shoppers notice. Instead of a generic “Leather Bag,” go for something detailed like “Handcrafted Leather Laptop Bag – Durable & Stylish.” This helps your items rank better in search results and instantly

    • Customer Parent Account or Sub-Customer Account

      Some of clients as they have 50 to 300 branches, they required separate account statement with outlet name and number; which means we have to open new account for each branch individually. However, the main issue is that, when they make a payment, they

    • Forced Logouts - Daily and More Frequent

      In the last month or so, I've been getting "power logged out" of all of my Zoho apps at least daily, sometimes more frequently. This happens in the same browser session on the same computer, and I need to re-login to each app separately after this happens.

    • Paste issues in ZOHO crm notes

      Hi, since a week or so I have issues with the paste function in ZOHO CRM. I use "notes" to copy paste texts from Outlook emails and since a week or so, the pasting doesnt function as it should: some text just disappears and it gives a lot of empty lines/enters.....

    • ENTER key triggering Submit

      Is it possible to stopped the ENTER key from the mandatory triggering of the Submit button on Creator form? I want forms submitted "ONLY" when the Submit button is pressed. 

    • Is it possible to assign Client user to external task ON PROJECTS' TEMPLATES?

      Is it possible to assign Client user to external task ON TEMPLATES PROJECTS?

    • Draft & Schedule Emails Directly in Bigin

      Greetings, I hope all of you are doing well. We're happy to announce a few recent enhancements we've made to email in Bigin. We'll go over each one in detail, but here's a quick overview: Previously, you couldn't draft or schedule emails in Bigin, but

    • Cannot Invert Axis for Rankings

      Hi there I want to be able to create a ranking graph in Analytics/BI, with 1 at the top of the Y axis, but I am unable to invert the axis. Super simple example in Excel below. Higher rankings need to be higher up on the graph to give the correct visual

    • Zoho CRM Workflow and Function Backup Options

      Hi everyone! I have been able to make several backups of my CRM data and noticed that the Workflows and Functions are not included in these backups. To my knowledge, there is no backup feature for workflows and functions, which is problematic in of itself.

    • Cliq iOS can't see shared screen

      Hello, I had this morning a video call with a colleague. She is using Cliq Desktop MacOS and wanted to share her screen with me. I'm on iPad. I noticed, while she shared her screen, I could only see her video, but not the shared screen... Does Cliq iOS is able to display shared screen, or is it somewhere else to be found ? Regards

    • Cliq does not sync messages after Sleep on Mac

      I'm using the mac app of Cliq. When I open my mac after it was in sleep mode, Cliq does not sync the messages that I received. I always have to reload using cmd + R, which is not what I want when using a chat application.

    • Free Webinar : Unlock AI driven business insights with Zoho Inventory + Zoho Analytics

      Are you tired of switching between apps and exporting data to build customized reports? Say hello to smarter & streamlined insights! Join us for this exclusive webinar where we explore the power of the Zoho Inventory–Zoho Analytics integration. Learn

    • PO receive quantities

      At last, Zoho has finally got around to allowing us to receive a larger qty than recorded in the PO :-) Saves us all from editing the PO's before receiving larger quantities ( usual for us ) ! It's still in "beta" but available upon request, I've tested

    • Link to images

      I have added images in pages. I would like to link those images with linked in URL so that they open in new window. There is an option of image -> link but I am not able to use the same to open URL in new window. Please check the attached image. Can you

    • Canvas View - Print

      What is the best way to accomplish a print to PDF of the canvas view?

    • What's New in Zoho Analytics - October 2025

      Hello Users! We're are back with a fresh set of updates and enhancements to make data analysis faster and more insightful. Take a quick look at what’s new and see how these updates can power up your reports and dashboards. Explore What's New! Extreme

    • Respond faster and smarter with Zia in your IM Inbox

      You’re in the middle of a busy chat queue. New messages keep popping up. One customer sounds upset. Another is asking a long list of questions. You need context. You need speed. You need help. That’s exactly when Zia Insghts jumps into action. It shows

    • Meeting impossible to use when sharing screen

      he Meeting tool in Brazil is practically unusable when sharing anything, whether it’s a presentation or simple navigation. When accessed via Cliq, the situation gets even worse: even basic calls fail to work properly, constantly freezing. And as you are

    • Let's Talk Recruit: Meet Zia, your all-in-one AI assistant (Part-2)

      Welcome back to Let’s Talk Recruit series. In Part 1, we introduced Zia and how AI is reshaping the way recruiters work. This time, we’re taking a closer look at how far Zia has come and how each update continues to simplify your everyday tasks. When

    • WARNING : Smart list automatically unsubscribes your contacts.

      I created a smart list of my team members based on the criterion that their email domain was @_____. The list refreshed as expected — but it ended up unsubscribing almost all members of my team. I contacted support, but it took two months to get a reply,

    • Export Purchase orders as Excel

      Is it possible to export purchase orders as excel rather than PDF? Our suppliers don't want orders made in PDF, they need it to be excel

    • 5名限定 課題解決型ワークショップイベント Zoho ワークアウト開催のお知らせ (10/31)

      ユーザーの皆さま、こんにちは。Zoho ユーザーコミュニティチームの中野です。 10月開催のZoho ワークアウトについてお知らせします。 今回はZoomにて、オンライン開催します。 参加登録はこちら（無料）：https://us02web.zoom.us/meeting/register/BGYTysOnSqa9LA9eY2IKww ━━━━━━━━━━━━━━━━━━━━━━━━ Zoho ワークアウトとは？ Zoho ユーザー同士で交流しながら、サービスに関する疑問や不明点の解消を目的とした

    • Subforms in Stateless Forms

      Stateless Forms are very useful, but we can't build complex data entry pages without Subforms. Can this be implemented? This would make Stateless Forms truly powerful.

    • Billing Preferences per Account

      Hello, We are trying to setup Billing Preferences in Zoho Desk to set up a different pricing per account. We charge different pricing per hour per customer/account. Account A = 100 per hour Account B = 125 per hour In the Billing Preferences in Time Entry

    • Time entry preview for custom time entry templates.

      Our company needed time entries in a specific format to document our client interactions. Since we are using a custom time entry layout, we have lost the "preview" on the time entry tab. Using the default time entry layout, you get a small preview of

    • Set to Review for all

      We are testing the use of Writer as part of an internal review process for statement of work documents and have found that when the document is changed from Compose to Review by one person, that is not reflected for all others who view the document. Is

    • How to copy value from a single line field into a picklist field within a module's subform?

      Hello there, I have a single line field in a module's subform. I would like the value in the field to automatically update a picklist field within the same subform (both have items with the same names). Is this possible via function? Unfortunately, workflows

    • Implementing a Self-Invoicing/Vendor Portal in Zoho Creator

      Hello Zoho Community / Creator Experts, We would like to build a Self-Invoicing Portal (Vendor Portal) in Zoho Creator for our external contractors. Our goal is to allow approved contractors to log in, submit their invoice details (hours worked, project

    • Categorise Attachments

      We take ID, proof of address, right to work documentation and more.  I can upload a single file in to field, but we often receive multiple files for each category e.g. someone may send a separate file for the front and back of their national ID card.  My team don't have time to manipulate the files in order to upload them as a single file. The options, as far as I can tell, would be to create additional fields on attachments in order to categorise what the file is, or to be able to upload single

    • Blocked Email

      We are a Zoho One subscriber and use Yahoo as our MX provider. A few times each year, for the past four years, CRM blocks one or more of my Zoho One users from receiving internal email from CRM. This includes "@mentions" in all modules, and emails from

    • Able to change project on timelog entries

      Ability to move the timesheet entry from one project to another. When a user adds a wrong entry a manager can change/update the timesheet entry to the correct project.

    • What formula to use in computing total hrs and decimal hrss

      So , my data includes log im column , 2 breaks with 2 columns that says back and lunch and 1 column that says back and logged out. What formula should i use to be able to automatically have my total hours as I input time in each column? Thankyou

    • i cannot use <b></b> to bold the message in Creator C6!!!!???What?

      Dear experts and friends, Now Creator 6 blocking us from using <b></b> Anyone facing this issue? I faced it on Creator C6 Previously, it used to work. Now failed to work. Faint~ Seek guidance from everyone on how to bold the message. The super simple

    • Knowledge base: The nitty-gritty of SEO tags

      A well-optimized knowledge base with great SEO can benefit your company by allowing customers to find help articles and support resources using search engines. This enables customers to quickly and efficiently find the information they need without direct

    • Content Security Policy

      Is there a place in ZOHO CRM to add a Content Security Policy to allow for a call to a google.com map, from inside our current app? Or, how do I resolve the issue below?? jquery.js:1 Refused to load the script 'https://maps.google.com/maps/api/js?v=3.41&libraries=places&sensor=true&key=AIzaSyAyQzKeKSbLci4LwZhn9oXvtCkbUo1Ae4g&callback=map_loader'

    • Option to select location?

      As a business coach, I meet with clients at various public locations. I have two or three pre-determined locations that I meet at. I would like the client to choose the location when booking an appointment. Is there a way to do that with a single service, or is the best way to accomplish this by creating one service for each location offered?

    • Retainer invoice in Zoho Finance modlue

      Hello, Is there a way of creating retainer invoices in the Zoho Finance module? If not can I request this is considered for future updates please.

    • Next Page