Revenue Management: #4 What if there are uncertainties in project or service delivery?

Revenue Management: #4 What if there are uncertainties in project or service delivery?

Our previous post taught us how Zoho Billing makes life easy for businesses with its automated revenue recognition rule. However, certain businesses have more challenges that an automated system cannot handle, and there are certain situations where automated revenue recognition is not feasible. For example, construction services paid in advance but with uncertain start dates can make the revenue recognition rule look inappropriate. Some manual interventions are needed to handle this scenario.

Manual revenue recognition
in Zoho Billing helps you handle these uncertainties. It is used when the timing and amount of revenue cannot be determined accurately through automated rules. This is common in industries such as construction, where project completion is tied to milestones that may occur at irregular intervals.


Example 1:

Imagine a construction firm signs a $50,000 contract to renovate a commercial building. The client pays the entire amount upfront, but the agreement specifies that the revenue will be recognized only as key project stages are completed. Each milestone carries a defined value or percentage of the total contact, say,

  • Design & Approval Phase: $5000

  • Demolition & Site Preparation: 30% of the total contract value

  • Structural & Roofing Work: 40% of the total contract value

  • Interiors & Handover: 100% of the remaining

Milestone

Recognition

Completion Date

Amount Recognized

Design & Approval

Fixed Cost

12/Jan/2025

$5000

Demolition & Site Preparation

30% of the total contract

20/Feb/2025

$15,000

Structural & Roofing Work

40% of the total contract

25/Apr/2025

$20,000

Interior & Handover

100% of the balance

30/Jun/2025

$10,000

Total Revenue Recognized= $50,000


The company ensures that its financial statement accurately reflects real project progress by only reporting revenue when each phase is completed, rather than relying on an automated schedule that may not match the actual work done.

If you look at the revenue recognition report, it will show up like this,


i) Recognized Revenue Report

At the end of the project,

Month

Recognized Revenue

Jan 2025

$5000

Feb 2025

$15,000

Mar 2025

$0

Apr 2025

$20,000

May 2025

$0

Jun 2025

$10,000

Total Recognized

$50,000

 

ii) Deferred Revenue Report

As the project progresses, deferred value gets recognized.

Month

Deferred Revenue

Jan 2025

$45,000

Feb 2025

$30,000

Mar 2025

$30,000

Apr 2025

$10,000

May 2025

$10,000

Jun 2025

$0

 

iii) Revenue Waterfall Report

Billing Date

Total Billed

Jan 2025

Feb 2025

Mar 2025

Apr 2025

May 2025

Jun 2025

Recognized Revenue

Deferred Revenue

Jan 2025

$50,000

$5,000

$15,000

$0

$20,000

$0

$10,000

$50,000

$0

 

The project owner ensures that revenue is recorded accurately only after each milestone is completed, and this is done manually without any specific frequency.


Example 2:

A software consulting firm signs a $120,000 contract to implement an in-house ERP solution with a client. The client pays the amount upfront, but the project involves phases that don't follow uniform timelines/deadlines.

The defined timelines are,

  • Requirement Analysis & Resource Planning: $10,000

  • System Customization: 25% of the total contract

  • Testing & QA: 35% of total contract

  • Deployment & Support: Remaining contract value

 

Milestone

Recognition

Completion Date

Amount Recognized

Requirement Analysis & Planning

Fixed Cost

15/Jan/2025

$10,000

System Customization

25% of the contract value

10/Mar/2025

$30,000

Testing & QA

35% of the contact value

25/May/2025

$42,000

Deployment & Support

100% of the balance

30/Jul/2025

$38,000

Total Revenue Recognized= $120,000

 

When you look at the revenue recognition report for this software deployment, it will show up as follows,


i) Recognized Revenue Report

At the end of the deployment,

Month

Recognized Revenue

Jan 2025

$10,000

Feb 2025

$0

Mar 2025

$30,000

Apr 2025

$0

May 2025

$42,000

Jun 2025

$0

Jul 2025

$38,000

Total Recognized

$120,000

 

ii) Deferred Revenue Report

As the development progresses, deferred value gets recognized.

Month

Deferred Revenue

Jan 2025

$110,000

Feb 2025

$110,000

Mar 2025

$80,000

Apr 2025

$0

May 2025

$38,000

Jun 2025

$38,000

Jul 2025

$0

 

iii) Revenue Waterfall Report

Billing Date

Total Billed

Jan 2025

Feb 2025

Mar 2025

Apr 2025

May 2025

Jun 2025

Jul 2025

Recognized Revenue

Deferred Revenue

Jan 2025

$120,000

$10,000

$0

$30,000

$0

$42,000

$0

$38,000

$120,000

$0

 

Manual revenue recognition is critical when automated rules don't serve the purpose. As we saw through construction and IT consulting examples, Zoho Billing allows businesses to recognize revenue at the right amount and time, ensuring financial statements remain aligned with real project progress.


While we learn the manual recognition process, we will explore these specific industry types in future posts and provide a detailed walk-through of how these businesses record their earnings.

Our next post will start with the SaaS industry, where revenue recognition follows a very different pattern. Unlike milestone-based revenue recognition, SaaS depends more on a recurring billing cycle.

Stay tuned as we explore revenue recognition for SaaS businesses in a few days. 
    • 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

    • India Tech Support

      Is there no phone tech support number for India? And no chat facility either?
    • Billing Management: #1 Billing a Universal Business Routine

      Hello, As the saying goes, "Do the hardest job first." We started with the complex subject of finance and revenue management, which is considered the backbone of any business. Now, let's shift our focus and take a deep dive into this Billing Management,
    • Show/ hide specific field based on user

      Can someone please help me with a client script to achieve the following? I've already tried a couple of different scripts I've found on here (updating to match my details etc...) but none of them seem to work. No errors flagged in the codes, it just
    • What is a a valid JavaScript Domain URI when creating a client-based application using the Zoho API console?

      No idea what this is. Can't see what it is explained anywhere.
    • 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 (9/25)

      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藤澤です。 9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。 諸事情につき、今月の開催回は中止となりました。 次回は10/31(金)14時からの開催を予定しています。 ━━━━━━━━━━━━━━━━━━━━━━━━ 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「Zoho ワークアウト」を開催します。 Zoho
    • Zoho Calendar not syncing correctly with personal Google Calendar

      Coming to this forum as Zoho Calendar support team is not responding, any more. For the past 8 weeks, I have been having an issue with Zoho Calendar not syncing with my personal Google Calendar correctly. I subscribed to Zoho Calendar iCal in my personal
    • Introducing Assemblies and Kits in Zoho Inventory

      Hello customers, We’re excited to share a major revamp to Zoho Inventory that brings both clarity and flexibility to your inventory management experience! Presenting Assemblies and Kits We’re thrilled to introduce Assemblies and Kits, which replaces the
    • 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
    • need a packing list feature

      In our business, goods listed on an invoice are packed in separate boxes and shipped off. for e.g. an invoice may have 10 items. each item could then be packed in different boxes depending on qty of each item. this packing list is as important as the invoice for purposes of shipping documents.  Request you to add this feature asap.
    • Workdrive 5.0 / API Documentation Workflows

      Hi Zoho, When will the API documentation of the workflows be published? We are interested in using it to trigger manual workflows from an external application. Greetings, Justin
    • How to keep track of bags, cans, drums of inventory?

      We buy and sell products that are packaged in bags 🛍️, cans🥫, drums🛢️, etc. with batch numbers. When we get a shipment of one of the products, how do we track we received (say) 10 cans each of 5L of a product and maybe we received 10 cans of another
    • Zoho Error: This Operation has been restricted. Please contact support-as@zohocorp.com for further details

      Hello There, l tried to verify my domain (florindagoreti.com.br) and its shows this error: This Operation has been restricted. Please contact support-as@zohocorp.com for further details. Screenshot Given Below -  please check what went wrong. Thanks
    • How many ZOHO-Sites does the ZOHO-One Suite allow for?

      The free version of ZOHO-Sites allows for two sites, but it seems that the professional version (which is included in the ZOHO-One Suite) only allows for two websites. Is that correct? How many sites can I have within one ZOHO-One account?
    • Replace Lookup fields ID value with their actual name and adding inormation from subforms

      Hi everyone,  I wanted to see if someone smarter than me has managed to find any solutions to two problems we have. I will explain both below.  To start we are syncing data from Zoho CRM to Zoho Analytics and I will use the Sales Order module when giving
    • Webhook from Zobot to Zoho Flow fails

      I'm trying to connect from zobot to zoho flow. When testing in zflow, I am receiving all entered data from the connector correctly. The SalesIQ connector's "outputreaction" is {} (is this normal or is there a problem?). But as soon as I try my chat bot
    • Transition from Sole Proprietorship to GmbH (Limited Liability Company) – Best Approach in Zoho Books / Zoho One

      Hello everyone, I am currently operating under a Zoho One plan with a sole proprietorship in Switzerland. As of January 1st, 2026, I will be incorporating a new legal entity – a GmbH (Swiss equivalent of a Limited Liability Company). While the business
    • Best way to display complex Bookings Consultation Descriptions on Zoho Site?

      I am a new user so apologies if this has been asked before. I couldn't find any answers in the forum. We offer 18 complex Consultations to our subscribers. Our current platform lets me put detail on these Consultations thoroughly (200-300 words) during
    • DKIM cannot be enabled for the domain as no verified default selector present

      Hi Support Team, For Domain DKIM record trying to enable status. but showing error "DKIM cannot be enabled for the domain as no verified default selector present" So, please resolve the issue. Thank you.
    • Issue Connecting My Domain to Zoho Sites Despite Purchasing It from Zoho

      Hello, I am facing an issue connecting my domain to my website on Zoho Sites. Details of the issue: I purchased the domain directly from Zoho. I am already using the same domain successfully with Zoho Mail. However, when I try to assign this domain to
    • Insert auto number from main form into subform rows

      Hello. I'm trying to take from my main form "order number" which i have setup as an auto generated number into every line created in my subform. So when a row is created in my subform i want the "order number " from the main form to be inserted automatically.
    • Dark Mode - Font Colors Don't Work

      When editing a document in Dark Mode and selecting font colors, they don't show up on screen.  Viewing/editing the same document in Light Mode shows them just fine.
    • Integrate Bunq with ZOHO Bookes

      We are new users of ZOHO Books, and our bank (BUNQ, in the Netherlands) isn't listed on the bank integrations. Is there a way to handle this?
    • 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
    • Access Denied

      I am iOS Developer and updating our clients project and shifted ZohoDeskPortalCore SDKs from cocoapods to SPM and changed few lines of code but now i am get access denied, the help center app is unavailable. please contact administrator.
    • Using Zoho Desk to support ISMS process

      Hi, I am evaluating using Zoho Desk for security incident management. This seems to be aligned with Zoho Desk purpose as its just another type of incident. However in security incident management, ideally I can link incidents (tickets) with a risk from
    • Bin Locations

      Dear all, I am wondering if someone has the ability to develop the bin locations option for zoho inventory (integrated with zoho books) Regards, Ryan
    • TaxJar vs Avalara

      Hi, I'm evaluating adoption of a sales-tax service for US based business. Anyone else have experience with TaxJar and Zoho Books? I am a Zoho One subscriber so anticipate needing to use Flow to make this work. It seems like Avalara are simply too expensive
    • How to check Leads with no Task (open activity)

      Hi everyone, I was wondering if there’s a way to view leads that don’t have any tasks assigned or open activities linked to them.
    • What can we do on our end to improve the Answer bot answers?

      Hi, I'm using the Answer bot card in the Codeless bot builder. I've input several questions and their answers in the FAQ section to feed the Answer bot. The text is all in French, as this is the language our customers communicate in. I've tried testing
    • Taxes for EU B2B Transactions

      Currently, ZC doesn't seem to have a procedure for validating VAT numbers of businesses purchasing in another EU state, and removing local VAT is valid.  This is essential for all inter EU B2B trade.
    • How to upload file to Connect using API?

      Hi there. I looked at the API documentation and nowhere did it mention how to use the API method to upload a file even though it is mentioned that it is possible to be done so. Please help.
    • Items Landed Cost and Profit?

      Hello, we recently went live with Zoho Inventory, and I have a question about the Landed Cost feature. The FAQ reads: "Tracking the landed cost helps determine the overall cost incurred in procuring the product. This, in turn, helps you to decide the
    • Group Tax in Service Line Items

      Hi FSM Team! I noticed that when you update a tax in the service line item the group tax is not showing up as an option. Let me know what can be done thank you!
    • FSM Improvement Idea - Show an Import button when there is no data

      I am setting up FSM for a client and I noticed that there is no option to import data, see screenshot below. Even when you click Create Contact there is only an option to Import from Zoho Invoice. It is only after you add at lease 1 record that the Import
    • Zoho FSM API Delete Record

      Hi FSM Team, It would be great if you could delete a record via API. Thank you,
    • OAUTH_SCOPE_MISMATCH Error for Marketing Automation APIs with CRM Plus Account

      I'm trying to integrate Marketing Automation journey triggering via API but getting OAUTH_SCOPE_MISMATCH errors. I need clarification on API access for CRM Plus users.
    • Access token generate from the refresh token not working for API

      Dear Sir/Madam, When I use my refresh token to obtain new access_token, that token return INVALID_TOKEN when the same API is called. I made sure that my api site is correct and match the auth web site. However the original access_token work fine.
    • Function #4: Schedule Customer Statements

      Regularly sending statements to customers is an imperative part of many business processes as it helps foster strong customer relationships and provides timely guidance on payments. While you can generate the statement of accounts and have it sent over
    • Limiting search or dependencies with an asterisk "*".

      I have a form with several dependency fields with options still developing for each field. Since these options were developing and not yet ready to be a selection in the field, I placed a filter for the dropdown field. In this filter, I selected fields
    • Improved RingCentral Integration

      We’d like to request an enhancement to the current RingCentral integration with Zoho. RingCentral now automatically generates call transcripts and AI-based call summaries (AI Notes) for each call, which are extremely helpful for support and sales teams.
    • Next Page