Revenue Management: #10 Common Mistakes while Recognizing Revenue

Revenue Management: #10 Common Mistakes while Recognizing Revenue


We are at the end of the series on Revenue Management, covering how different businesses recognise revenue. Even with clear standards like ASC 606 and IFRS 15 in practice, businesses often struggle with the nuances of revenue recognition. Especially growing businesses that are so keen on scaling take a wrong foot.


Where do businesses often go wrong, and how can they avoid it? 


Here are some of the common mistakes businesses make and suggestions for avoiding them before they cause us harm.


Recognizing Revenue Early
A common mistake is recording the full value of a contract or an invoice as recognized immediately upon payment, especially for services or subscriptions delivered over time. This inflates revenue in the short term and understates liabilities.

To avoid this, Businesses should ensure revenue is recognized only when performance obligations are met, not when billing or cash collection. This avoids overstating earnings in the short term and ensures compliance with ASC 606/IFRS 15. Deferred revenue schedules and automated recognition tools can help align recognition with delivery.

Ignoring Performance Obligation
Many companies fail to separate multiple deliverables in a contract, such as onboarding, training, support, or updates. This results in an improper allocation of revenue across the contract's life.

Contracts often include multiple deliverables, such as onboarding, training, or ongoing support. Each should be treated as a separate performance obligation, and revenue should be allocated based on its standalone selling price.

Overlooking Discounts
Revenue must be recognized based on the actual transaction price, not the list price. Failing to adjust the discounts, credits, or rewards provided will inflate the financial figures.

To overcome this, Revenue must be recorded at the true transaction price, not the list price. Discounts, reductions, credits, and incentives should be factored in from the start, and estimates for variable consideration should be reassessed periodically. This ensures reported revenue reflects the real value of the customer contracts.

Failing to Update Contract Amendments
Mid-term changes like upgrades, downgrades, or cancellations must be tracked properly. A reassessment must be performed based on the revised obligations and the revenue that remains deferred. Many companies fail to do this or skip this recalibration step.

Upgrades, downgrades, extensions, or cancellations require proper revenue reassessment. Businesses should clearly distinguish whether a change creates a new contract or modifies the existing one. Automated systems that recalculate deferred balances can simplify this process and ensure accurate reporting.

Manual Spreadsheets
Racking revenue manually through spreadsheets increases the risk of errors, especially when managing deferrals, returns, or variable billing models. Automating this process with tools like Zoho Billing ensures accurate, hassle-free recognition with audit-ready reporting.

Manual spreadsheets are prone to errors and limit scalability. Adopting automated revenue recognition software ensures accuracy and reduces compliance risk. Strong internal policies, approval workflows, and finance team training enhance accuracy and reliability. 



Notes
Key Takeaway

With the right processes and tools, these challenges can be avoided. Businesses that invest in automation and adopt best practices early on will be better positioned to scale sustainably while maintaining compliance with recognition standards. 

Zoho Billing is designed to simplify revenue management by automating recognition, tracking contract changes, handling deferred revenue schedules, and ensuring audit-ready compliance. It provides the accuracy, transparency and scalability needed for growing businesses to keep revenue recognition on the right foot. 
​






    • 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

    • Zoho Calendar soft bounce on @hotmail.com and @yahoo.com email addresses

      Hello, our Zoho calendar recently does not send the calendar invites to emails with hotmail and yahoo domains and comes back with a "soft bounce". other domains like Gmail works fine. Also sending "email" to the same emails to the above domains work well

    • ERROR CODE :512 - 5.4.4 DNS error:NXDOMAIN.

      Suddenly we cant send mail, we are getting this error for all outbound mail to multiple domains.

    • Can Zoho Flows repeat Actions more than once?

      I'm attempting to make an intentional Zoho Flow loop using the below layout. However, when "WithinLimit" condition is met, the program fails to execute the action "Get & Add Request Co..." again. Is this by design? Is Zoho Flows unable to repeat actions

    • Unveiling Cadences: Redefining CRM interactions with automated sequential follow-ups

      Last modified on 01/04/2024: Cadences is now available for all Zoho CRM users in all data centres (DCs). Note that it was previously an early access feature, available only upon request, and was also known as Cadences Studio. As of April 1, 2024, it's

    • customer data security

      We are exploring ways to enhance our within Zoho CRM. Our Goal: We want to fully integrate RingCentral with Zoho CRM to enable click-to-call functionality for our sales team. However, to comply with data privacy regulations and protect customer contact

    • Zoho Cliq not working on airplanes

      Hi, My team and I have been having this constant issue of cliq not working when connected to an airplane's wifi. Is there a reason for this? We have tried on different Airlines and it doesn't work on any of them. We need assistance here since we are constantly

    • Sync CRM inventory data with Zoho Books

      I just switched everything over to ZoHo books, but I am trying to find out why the CRM Estimates, Invoices, and Sales Orders created in ZoHo CRM are not then duplicated in ZoHo Books? I had Quickbooks before, and had to do everything twice, I thought

    • mask Customer phone number and agents cant see customer phone number

      Is there any way we can integrate Zoom Phone with Zoho CRM while ensuring that customer phone numbers remain masked? We need a solution where agents can make outbound calls but cannot see customer phone numbers. Please let us know if there is any solution

    • Email Reminders on Shared Calendars

      How do we turn off the setting that emails reminders to everyone who has accepted or declined a calendar invite? If 8 of us have been invited to the same meeting, we receive 8 notifications for every step of the process, from invitation to decision.

    • Default Sorting on Related Lists

      Is it possible to set the default sorting options on the related lists. For example on the Contact Details view I have related lists for activities, emails, products cases, notes etc... currently: Activities 'created date' newest first Emails - 'created

    • One Contact with Multiple Accounts with Portal enabled

      I have a contact that manages different accounts, so he needs to see the invoices of all the companies he manage in Portal but I found it not possible.. any idea? I tried to set different customers with the same email contact with the portal enabled and

    • WebDAV / FTP / SFTP protocols for syncing

      I believe the Zoho for Desktop app is built using a proprietary protocol. For the growing number of people using services such as odrive to sync multiple accounts from various providers (Google, Dropbox, Box, OneDrive, etc.) it would be really helpful if you implemented standard protocols such as WebDAV / FTP / SFTP so that alternative inc clients can be used.

    • What's New in Zoho Inventory | Q2 2025

      Hello Customers, The second quarter have been exciting months for Zoho Inventory! We’ve introduced impactful new features and enhancements to help you manage inventory operations with even greater precision and control. While we have many more exciting

    • How to refresh a ticket view ?

      I am doing a widget where I send a rest api call to make a new draft to the ticket I am viewing. The issue is sometimes it refresh a ticket view and I can see inserted draft right away, but sometimes I do not see it even if it is inserted correctly and

    • Ugh! - Text Box (Single Line) Not Enough - Text Box (Multi-line) Unavailable in PDF!

      I provide services, I do not sell items. In each estimate I send I provide a customized job description. A two or three sentence summary of the job to be performed. I need to be able to include this job description on each estimate I send as it's a critical

    • Merge Items

      Is there a work around for merging items? We currently have three names for one item, all have had a transaction associated so there is no deleting (just deactivating, which doesn't really help. It still appears so people are continuing to use it). I also can't assign inventory tracking to items used in past transactions, which I don't understand, this is an important feature moving forward.. It would be nice to merge into one item and be able to track inventory. Let me know if this is possible.

    • Supervisor Rules - Zoho Desk

      Hi, I have set up a Supervisor Rule in Zoho Desk to send an email alert when a ticket has been on hold for 48 hours. Is there a way to change it so that the alert only sends once and not on an hourly basis? Thank you Laura

    • ResponseCode 421, 4.7.0 [TSS04] Messages from 136.143.188.51 temporarily deferred due to user complaints

      Had email bounce. Let me know if you can fix this. Thanks. Michael

    • Zoho Canvas - Custom templates for related lists

      Hi, I see that the example pages load always one of our related lists in a custom template, but I dont know how to work with that:  1) How can i make my own custom templates for related lists?  2) Where and how can i check out existing custom templates?

    • Automation #15: Automatically Adding Static Secondary Contacts

      Rockel is a top-tier client of Zylker traders. Marcus handles communications with Rockel and would like to add Terence, the CTO of Zylker traders to the email conversations. In this case, the emails coming from user address rockel.com should have Terence

    • New Zoho triggers Google Dangerous flag due toabnormal charcters

      Just signed up and doing my first email test. I sent it to my google email account but it got flagged as Dangerous" due abnormal characters. My DNS setup looks ok. Page snips attached Help Please Thanks, Rick DC PowerWorld

    • Is there a API to fetch tasks in a Board/Section

      I am writing a scheduled function that retrieves all the tasks and send an reminder on cliq. I cannot seem to find a API to fetch tasks (by user / board / section) What are the way to fetch tasks?

    • Having trouble fetching contents of Zoho Connect Feeds using the API, requesting alternative API documentation.

      I'm trying to retrieve feed/post data from Zoho Connect using the API but facing challenges with the current documentation. What I've tried: OAuth authentication is working correctly (getting 200 OK responses) Tested multiple endpoints: /pulse/nativeapi/v2/feeds,

    • Adding an Account Name to Tasks/Reminders

      Does anyone know how to add the related account name to a task?  When we look at the list of activities and when the reminders pop up, there is no way of quickly seeing who the account is. 

    • Triggering Zoho Flow on Workdrive File Label

      Right now Im trying to have a zoho flow trigger on the labeling/classification of a file in a folder. Looking at the trigger options they arent great for something like this. File event occurred is probably the most applicable, but the events it has arent

    • SendMail to multiple recipients

      Hi, I'm trying to send an email to a list of recipients.  Right now the "to" field is directed to a string variable. (List variables won't work here). In the string variable, how can I make it work? trying "user@app.com;user2@app.com" or "user@app.com; user2@app.com" just failed to send the emails. Ravid

    • Populate drop down field from another form's subform

      Hello, I found how to do that, but not in case of a subform. I have a Product form that has a subform for unit and prices. A product might have more than one unit. For example, the product "Brocoli" can be sold in unit at 3$ or in box of 10 at 25 $. Both

    • Usar o Inventory ou módulo customizado no CRM para Gestão de Estoque ?

      Minha maior dor hoje em usar o zoho é a gestão do meu estoque. Sou uma empresa de varejo e essa gestão é fundamental pra mim. Obviamente preciso que esse estoque seja visível no CRM, Inicialmente fiz através de módulos personalizados no próprio Zoho CRM,

    • Signup forms behaviour : Same email & multiple submissions

      My use case is that I have a signup form (FormA) that I use in several places on my website, with a hidden field so I can see where the contact has been made from. I also have a couple of other signup forms (FormB and FormC) that slight differences. All

    • getting error in project users api

      Hello, I'm getting a "Given URL is wrong" error when trying to use the Zoho Projects V3 API endpoint for adding users to a project. The URL I'm using is https://projectsapi.zoho.com/api/v3/portal/{portalid}/projects/{projectid}/projectusers/ and it's

    • Change total display format in weekly time logs

      Hi! Would it be possible to display the total of the value entered in the weekly time log in the same format that the user input? This could be an option in the general settings -> display daily timesheet total in XX.XX format or XX:XX.

    • Different Company Name for billing & shipping address

      We are using Zoho Books & Inventory for our Logistics and started to realize soon, that Zoho is not offering a dedicated field for a shipping address company name .. when we are creating carrier shipping labels, the Billing Address company name gets always

    • How to display historical ticket information of the total time spent in each status

      Hi All, Hoping someone can help me, as I am new to Zoho Analytics, and I am a little stuck. I am looking to create a bar chart that looks back over tickets raised in the previous month and displays how much time was spent in each status (With Customer,

    • Zoho Projects iOS app update: Global Web Tabs support

      Hello everyone! In the latest version(v3.10.10) of the Zoho Projects app update, we have brought in support for Global Web Tabs. You can now access the web tabs across all the projects from the Home module of the app. Please update the app to the latest

    • Zoho Community Weekend Maintenance: 13–15 Sep 2025

      Hi everyone, We wanted to give you a heads-up that Zoho Community will undergo scheduled maintenance this weekend. During this period, some community features will be temporarily unavailable, while others will be in read-only mode. Maintenance Window:

    • Agent Performance Report

      From data to decisions: A deep dive into ticketing system reports An agent performance report in a ticketing system provides a comprehensive view of how support agents manage customer tickets. It measures efficiency and quality by tracking key performance

    • Show both Vendor and Customers in contact statement

      Dear Sir, some companies like us working with companies as Vendor and Customers too !!! it mean we send invoice and also receive bill from them , so we need our all amount in one place , but in contact statement , is separate it as Vendor and Customer, 

    • URL validation

      We use an internal intranet site which has a short DNS name which Zoho CRM will not accept.   When attempting to update the field it says "Please enter a valid URL". The URL I am trying to set is http://intranet/pm/ Our intranet is not currently setup with a full DNS name and given the amount of links using the shortname probably isn't a feasible change for us.

    • Pourquoi dans zohobooks version gratuite on ne peut ajouter notre stock d'ouverture??

      Pourquoi dans zohobooks version gratuite on ne peut ajouter notre stock d'ouverture ??

    • How can I adjust column width in Zoho Books?

      One issue I keep running into is as I show or hide columns in reports, the column widths get weird. Some columns have text cut off while others can take a fourth of the page for just a few characters. I checked report layout guides and my settings, but

    • Next Page