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. 

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. 

​

• Topic Participants

• Hari Hara Sudhan. S

  

• 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

• Per Level Approval for admins

  We need Process admins like Zoho CRM in Zoho Books for per stage approval Currently in books, admins only have the option for Final Approval But for example, in cases like when an employee is on leave, we can't just approval one level we only have option

• Feature enhancement: Highlight rows based on a cell value

  Hello Sheet users, We're excited to announce a new feature enhacement, shaped directly by your valuable feedback! As you might know, conditional formatting is a great tool for anyone dealing with large data sets. Previously, if you’ve ever wanted to draw

• Updating custom fields in Zoho Projects

  Hi I am wondering if anyone has experience with custom fields in Zoho Projects. I am struggling to update the field using either deluge or the api endpoint. My code is: //custom_Map = map(); custom_Map = {"UDF_DOUBLE_1":"0.27"}; update_Map = map(); update_Map.put("custom_fields",custom_Map.toList());

• Markdown for Desk?

  Hi, my company wants to use markdown for formatting text in Desk (in all modules there, especially Tickets and Helpcenter). Zoho already offers use of markdown in several products (see https://help.zoho.com/portal/en/kb/backstage/microsite-guide/formatting-with-markdown/articles/formatting-with-markdo)

• Change Currency symbol

  I would like to change the way our currency displays when printed on quotes, invoices and purchase orders. Currently, we have Australian Dollars AUD as our Home Currency. The only two symbol choices available for this currency are "AU $" or "AUD". I would

• Calendar not working

  Are we the only ones. On any browser we cannot click on any of our calendar appointments and get them to open. They just make the browser loop. WE have reached out and have been told they are working on it. The office staff are really stuck. The point

• Tip of the week #16 - Search and filter threads based on criteria

  Zoho TeamInbox lets you search and filter threads with any information that you have about the thread. You just have to input the criteria and Zoho TeamInbox will list all the threads that match the condition.   Firstly, there is a global search you can

• WhatsApp Message Template Quick Reply Buttons

  Hello, I created my first Message Template to overcome the 24-hr messaging window and it was approved by WhatsApp/Meta. When I go to Meta, I also see that template brought from Zoho Desk, and used it via Zoho Desk IM. However, I notice that when in Meta's

• Account in Quick View Filter

  I have a report that I often run against a specific Account. Every time, I have to go into the edit menu and change the Advanced Filter. I would prefer to use the Quick View Filter, but it does not allow me to use the one and only field that makes any

• Collapsible Sections & Section Navigation Needed

  The flexibility of Zoho CRM has expanded greatly in the last few years, to the point that a leads module is now permissible to contain up to 350 fields. We don't use that many, but we are using 168 fields which are broken apart into 18 different sections.

• Set Display for Numbers/Currency/etc with Client Script/Customization in Canvas List Page

  Is it possible to set a display mask for a number/currency field using Client Script or customization? I have custom fields that I would like to keep the decimal places for calculation purposes, but do not need them displayed to the user. So 101.3568

• 136.143.188.51 blocked by spamcop

  Zoho mailserver seems to be blocked by spamcop. Cant send mail to my customer. Not sure what to do.

• 🚀 WorkDrive 5.0: Evolving from a file sharing app to an intelligent content management platform: Phase 2

  Hello everyone, WorkDrive's primary focus has always been to provide an intelligent and secure content management platform, simplify collaboration, and be the central repository of files for all Zoho apps. In our previous announcement, we unveiled the

• i keep see there is a connetion issue connecting 3rd party api on zoho when using zia

  hi there , i have set up open ai api to zoho zia (copied and pasted to zoho zia) but I keep getting notificaiton "there is a connetion issue connecting 3rd party api on zoho" when using zia on top when click zia and try to type in word there

• Deleting Fields in CRM Deletes Views in Analytics

  Hey friends! I'm having some issues when we modify some fields within ZohoCRM. There are times where we need to sunset a field and eventually completely remove it. In these instances, it seems like a lot of views are removed in Analytics. This ranges

• Booking outside of scheduled availability

  Is there a way for staff (such as the secretary) to book appointments outside of the scheduled availability? Right now to do this special hours must be set each time. There should be a quicker way. Am I missing something?

• Zoho Desk Android and iOS app update: Access multilingual templates on the IM module

  Hello everyone! We have introduced multilingual templates on the IM module of the Zoho Desk mobile app allowing you to send IM template messages in translated versions. iOS: Android: Please update the app to the latest version directly from the App Store/

• Does Zoho offer a full WhatsApp Marketing Platform (like WATI / GallaBox)?

  lm exploring WhatsApp marketing and I’d like to understand what options are available within the Zoho ecosystem. Currently, I see: Zoho SalesIQ has a broadcast option, but it seems very limited — for example, it doesn’t support uploading contacts via

• Custom buttons

  Getting Error "You can only create 10 custom buttons per module" ! I already have more than 10 for 1 module before trying to create another. Is this a new restriction brought about by the all knowing what's best for businesses Zoho guru ? It would be

• The Social Wall: October 2025

  Hello everyone, As we head toward the end of the year, we’re bringing you a few updates to help give your social media efforts a strong finish. This month, we’re rolling out new enhancements across both the web and mobile app. Post Preview Have you ever

• Client Script | Update - Support for List Page (Canvas) and Notes

  Hello everyone! We are glad to announce two exciting updates in Client Script. Client Script support for List Page (Canvas) Client Script support for Notes These open the door to more dynamic and interactive customizations! 1. Client Script support for

• Pincode Based Pricing

  We want to give extra discount to customers within city limits because our shipping and packing costs are less. My proposal is assign list of pincodes to price list and assign the price list to customers whenever they sign up with pincodes. Also show

• feature question: lookup field in Projects task layout

  Hello, Below we have interface to configure a custom task layout, however, we need a lookup field to let pickup data from other apps, such as Zoho CRM Products module, is that possible or already in your roadmap? or a workaround to achieve it? Thanks in advance.

• Plan change from Zoho One to Zoho Workplace

  Hello Zoho, Following the recent pricing update for Zoho One, we are interested in transitioning to Zoho Workplace products. Please inform us about the necessary steps for this process so we can proceed promptly. Kind regards,

• Can we do Image swatches for color variants?

  We want to do something like the attached screenshot on our new zoho store. We need image swatches instead of normal text selection. We want to user to select an image as color option. Is this doable? I don't see any option on zoho backend. Please h

• 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

• Zoho Analytics & SQL Server - Live connect

  Below are the steps I did Created a fresh database and table in my own virtual server Created a new data source connection with live connect I was able to select the tables and created the data source successfully I am getting the error when I try to

• Explore the Redesigned Quotes Module in Zoho Billing

  Dear users, We’re excited to introduce a refreshed look for the Quotes details page in Zoho Billing! This update brings you a more efficient user interface experience without changing your existing workflow. We've enhanced layouts with organized tabs,

• Latest updates in Zoho Meeting | Create departments, Share PDF files

  Hello all,   You can now create departments to group team members within your organization. This will make it easier for you to organize department-level meetings and invite members. In webinars, use the Share material feature to share PDF files directly

• Unify All Zoho Video Meeting Experiences into One Standardized Platform

  Hi Zoho Team, We would like to share an important user experience concern regarding the current state of video meeting functionality across the Zoho ecosystem. The Problem Within Zoho, there are multiple ways to initiate or schedule a video meeting: Zoho

• [Free Webinar] Product Updates: Quick Catch-Up Session - Part I - Creator Tech Connect

  Hello Everyone! We welcome you all to the upcoming free webinar on the Creator Tech Connect Series. The Creator Tech Connect series is a free monthly webinar featuring deep-dive technical sessions designed for developers, administrators, and app builders.

• Project expenses in Zoho Books

  Just the way timesheet is used to calculate labour cost for a particular project, how do i record other expenses against a project such as materials and consumables used for the project? So that under report, I can view the total amount expended on each

• Blueprint status change

  I want to change the Blueprint status of a workflow. The status is completed automatically when I added the record through API call. But I want to make it active, I don't see any options for this. Even if I draw transition from any stage , it is not visible

• What is going on with GMail extension.

  Suddenly, it is popping up and saying "Please wait while we work our magic... 10%" and it sits there. Yesterday I waited for an entire hour call and it never got further. Today, it's not resolved. Is there a fix I can do? I've tried all the typical

• Marketing Tip #6: Cross-sell with related products

  Don’t let customers stop at just one product. Suggesting related or complementary items improves the shopping experience and increases order value. Try this today: Use the Item Recommendations feature in Zoho Commerce and add two to three suggested items

• 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

• Zoho Writer - Option to Export as .zdoc format

  I've noticed that it's not possible to export a Zoho Writer Document in the .zdoc format. Isn't zdoc, Zoho Writer's own format? My use case is that I sometimes need to create quite complex documents with floating elements, which sometimes need to become

• [Announcement] Enhanced Merge APIs of Zoho Writer for automating document generation using Zoho Apps data

  Hi users, With the record_id parameter in Zoho Writer's Merge APIs, fields related to the given record id is automatically fetched from the Zoho app. You don't have to spend time manually mapping the records and fields in the Deluge code. Here is a sample

• Pin multiple columns and adjust column widths in CRM subforms

  Hello all, Subforms act as secondary forms or tables in which you can associate multiple line items to a primary record and thereby ensure more structured and comprehensive data organization. We've made some recent enhancements to subforms. Here's what's

• [Webinar] Automate sales and presales workflows with Writer

  Sales involves sharing a wide range of documents with customers across the presales, sales, and post-sales stages: NDAs, quotes, invoices, sales orders, and delivery paperwork. Generating and managing these documents manually slows down the overall sales

• Next Page