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.

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. 

• Topic Participants

• Hari | Zoho Billing

  

• 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

• How to see history on Bulk send of Customer Statements

  Hi, We bulk send statements to customers every month via Books - every month we have customers emailing requesting a statement. Currently I have no visibility on if a customer was sent the statement or not and if our process is being followed or overlooked

• Guided Conversations - Ticket Creation

  Hi there, Using Guided Conversations to Take Customer Data and apply it into a Support Ticket for internal use, Is there a way to take multiple Textual Variables Inputs (A series of questions), and have the answers all appear in the Description of the

• How to add buttons elements in the Header

  I am trying to add CTA (Call to Action) buttons in the right side of the main navigation menu. This is a common practice for sites but I can't seem to figure this out for Zoho Sites. Is there a custom workflow that could be shared with me? 

• Automatic back up - Zoho Recruit, books, people,crm, analytics

  Hello, Has anyone found a good way of automatically backing up Zoho (CRM, expense, recruit, people, books, analytics).? I have found with tool that does, but it doesn't include recruit or analytics It's a bit annoying and time consuming having to go to

• delete departments on zoho desk

  I created test departments on zoho desk. how can i delete them now?

• Validation, checking if a file has been attached to the ticket

  A very useful option would be to allow checking, under specific conditions, whether the user has attached a file to the application, e.g., a bug report. Some applications require files to be attached, and the system could enforce this after the system

• AI & Zoho Recruit

  Hello, I guess we all are using AI in our personal and professional lives. Now, let's imagine. Recruitment is just a succession of stages and steps. For which step would you like to see AI implemented into Zoho Recruit ? I'll start : - Automatic translation

• Zoho Flow not handling Boolean properly

  Hi, I have a checkbox in one system that I'm trying to sync with a checkbox in Zoho CRM. The value from the source system comes in as blank (unticked) or 1 (ticked). I've written the following custom function to convert the output to either boolean false

• Quotes Module - import data

  Hello Zoho, is it possible to import Quotes records? I was trying and i have no results. Raport shows no data imported. Could you help me please how to do it?

• Balance Sheet - Zoho Analytics

  Hi Team, I’m looking to implement a feature that captures the conversion rate based on the filters applied. By default, it should fetch the most recent conversion rate, and when a filter (such as a timeline filter) is applied, it should return the conversion

• files sent will not open for recipient

  work files (done in writer) which previously opened will not open for the recipient

• How to Print the Data Model Zoho CRM

  I have created the data model in Zoho CRM and I want the ability to Print this. How do we do this please? I want the diagram exported to a PDF. There doesnt appear to be an option to do this. Thanks Andrew

• Cisco Webex Calling Intergration

  Hi Guys, Our organisation is looking at a move from Salesforce to Zoho. We have found there is no support for Cisco Webex Calling however? Is there a way to enable this or are there any apps which can provide this? Thanks!

• Migration of Mails from Pipedrive

  Hi, so far the migration from Pipedrive to ZOHO works pretty good. For full completeness of the migration we miss all the mails linked to Deals, Contacts, Customers, ... What possibilities do we have to have Pipedrive fully migrated to ZOHO? Best Regards,

• Published sheets don't work anymore

  Hi, Published sheets don't work anymore. The display of values is very very slow and calculations are not displayed at all. Thanks!

• WorkDrive TrueSync for macOS 26 (Tahoe) Beta

  Hello everyone, With Apple unveiling the macOS 26 (Tahoe) Beta, we know many of you are eager to explore the latest features and enhancements. We’re excited to support your enthusiasm! As part of our commitment to delivering seamless cross-platform experiences,

• Limited layout rules in a module

  There is a limit of 10 layout rules per module. Is there a way to get that functionality through different customization or workflow + custom function (easily accessible), etc. Having just 10 is limiting especially if module contains a lot of data. Are

• #1 Zoho Billing vs. Zoho Books: Which one should I choose?

  Managing your business finances isn't just about sending invoices. It's about keeping everything organized, accurate, and moving towards your organization's goals. At Zoho, we understand the complexity, which is why we offer two powerful yet distinct

• Is Zoho tables still being developed?

  Has this product been abandoned? I haven't seen any useful new features or stability improvements over the past six months or more. I think Tables is a great concept, filling a niche between spreadsheets and full database tools, but the current implementation

• How to connect oracle ADW with Analytics

  I want to add Oracle ADW as a data source in Zoho Analytics, but I couldn't find any relevant documentation. Can anyone suggest how to do it, or let me know if it's even possible? Thanks!!

• RAG (Retrieval Augmented Generation) Type Q+A Environment with Zoho Learn

  Hi All, Given the ability of Zoho Learn to function as a knowledge base / document repository type solution and given the rapid advancements that Zoho is making with Zia LLM, agentic capabilities etc. (not to mention the rapid progress in the broader

• add attachments to automated emails?

  Hi, I'm looking for a way to have documents saved under an account, be grabbed and sent to an email address once a specific status has been updated.  For example we have a tab we've labeled as sales orders, when the status is changed to shipped, it emails the customer the tracking number and estimated delivery date.  I'd like it to also grab pdf docs (COA, BOL, etc) from that order and send in that email.   Currently we have to go into zoho change the status to shipped, then email all the docs to

• [Action Required] Zendesk - Zoho Analytics integration requires re-authentication

  Dear Zendesk integration users, Zendesk is transitioning to a new OAuth model that uses refresh tokens for improved security and stability (read more). As a result, all Zendesk users in Zoho Analytics must re-authenticate their Zendesk connections on

• Rerun Migration?

  I migrated a mailbox a few days ago, but didn't do the cutover on the MX records until today.  How can I rerun the migration to sync the mailboxes?  The old account has had a fair amount of activity since the first migration. I am used to other systems

• طلب حذف الدومين والمؤسسة من حساب zoho

  السلام عليكم، أود طلب حذف الدومين التالي من حسابي في Zoho، حيث لا يظهر لي خيار الحذف في لوحة التحكم: اسم الدومين: hudajstore.com البريد المرتبط: [contact@hudajstore.com] علمًا بأنني المسؤول عن المؤسسة، ولا أستخدم الدومين حاليًا، وأرغب في إلغاء ربطه وحذف

• Microsoft Outlook Add-in Update: Enhancing Efficiency for Recruiters

  We've released an update to the Zoho Recruit Microsoft Outlook Add-in, which brings a host of features designed to streamline your recruiting process and boost productivity. Let's delve into the details: Associate Emails with records in Zoho Recruit You

• New integration: Zoho Books + Zoho Forms

  Hello Zoho Forms community! We are thrilled to announce the addition of another integration that brings speed and efficiency to your financial workflows. Zoho Forms can now be integrated with Zoho Books! Here’s a quick rundown on Zoho Books! For anyone

• Witness Sign - Automation with Zoho Creator

  Hi there, I used to be able do automatically send a Zoho Sign document from Zoho Creator where each signer had one witness. The action code was as follows for each signer and witness:       // CLIENT eachActionMap1 = Map(); eachActionMap1.put("signing_order","1");

• Announcing: custom color palette + free workshop

  Hello everyone, We're excited to share new feature in Zoho Bookings—a color palette within booking page themes. You'll find this option under Manage Bookings > Workspaces > Booking Page Themes. You can customize the color of every element in your booking page and even alter the transparency of your background image. Please note that this is a paid feature included in the Basic and Premium plans. At the moment, it's available only under the Modern Web theme. This means you can create billions (7,

• Removing To or CC Addresses from Desk Ticket

  I was hoping i could find a way to remove unnecessary email addresses from tickets submitted via email. For example, a customer may email the support address AND others who are in the helpdesk notification group, in either the TO or CC address. This results

• Ability to Export Field Dependency Structure in Zoho Desk

  Hi Zoho Team, We’d like to request a feature enhancement in Zoho Desk that would greatly improve configuration management for organizations like ours: Requested Feature: The ability to export the full structure of Field Dependencies, especially for multi-level

• [URGENT] Allow reorder (drag&drop) of subform record

  Very simple user case: a wedding planning app where you want to send your client a form to fill with information about their wedding. Form includes some field for general purpose information and a subform for event pacing/schedule. Clients are invited to create a new row (When? - What? - Where? - Who?) for each thing happening during their wedding chronologically. Ex: When                  What 10h                      Something TBD                    Speech After speech      Yet another thing happening

• Departments in Zoho

  I'm trying to set up a department. It looks like Departments have been removed from Zoho One. Is there another option? We have our main account setup, but want to set up a separate small department that can't see our tabs.

• Add Timer for Agent Status Duration in Zoho Desk Dashboard

  Hello Zoho Desk Team, We hope you're doing well. We would like to submit a feature request to further enhance the agent status tracking functionality within the Zoho Desk Dashboard. 🎯 Current Functionality As it stands, Zoho Desk allows us to view the

• [Beta Feature] Parent-Child Ticketing

  Hello there, a beta parent-child ticketing feature has recently been made available for some, read more here: https://help.zoho.com/portal/en/kb/desk/ticket-management/articles/understanding-parent-child-ticketing-system#Business_scenarios I would like

• Enable Sorting by Ticket Count in Category Reports

  Hi Zoho Desk Product Team, I hope you're doing well. We would like to submit a feature request to improve the reporting capabilities in Zoho Desk. 🎯 Feature Request: Sorting by Ticket Count in Category Reports Currently, category-based reports in Zoho

• Reactivating a CRM user...

  I'm a 1-man business primarily using CRM under my Zoho1 subscription (I have NO other employees or users). I wish to re-activate a prior user (my son, once more working with me) but when changing his status from inactive to active I receive this message:

• Zohoサポートにスコープ開放を依頼する

  お世話になっております。 現在、弊社にてZoho DeskのナレッジベースをAPI経由で取得し、AIツール（NotebookLM等）に連携する仕組みの構築を検討しています。 つきましては、ZohoDesk.articles.READ スコープを使用したOAuth認証の許可をいただけますでしょうか。 API Console から Server-based アプリを作成済みですが、認可URLにアクセスすると「スコープが登録されていません」と表示されます。 お手数をおかけしますが、スコープの開放をご

• Where can I configure the notifications for everything KB-related?

  Hi all, I'm receiving notifications for some actions happening in our Knowledge Base (e.g. someone leaving a feedback) and I would like to customise the template or have the choice to enable/disable such notifications like it is possible for ticket notification

• Increase Round Robin Scheduler Frequency in Zoho Desk

  Dear Zoho Desk Team, We hope this message finds you well. We would like to request an enhancement to the Round Robin Scheduler in Zoho Desk to better address ticket assignment efficiency. Current Behavior At present, the Round Robin Scheduler operates

• Next Page