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

    • Where is the Global Search field?

      I am looking for an alternative to SF.com. Zoho CRM seems to be work fine, and be customizable in terms of the fields and reports. But there's one big thing missing and it's going to prevent us from using it: there's no global search box at the top of
    • Zoho Inventory - Managing Items With Multiple Suppliers

      Hi community, I'm working on a project at the moment for a car parts wholesale business. Each Item (part) has its own original manufacturer part number (sometimes more than one part number for the same item). When purchasing parts from 3rd party suppliers,
    • API 500 Error

      Hello amazing ZOHO Projects Community, I get this message. How can we solve this? { "error": { "status_code": "500", "method": "GET", "instance": "/api/v3/portal/2010147XXXX/projects/2679160000003XXXX/timesheet", "title": "INTERNAL_SERVER_ERROR", "error_type":
    • Send Whatsapp message from Whatsapp template with custom variables

      Hi, I'm trying to do some basic integration for sending WhatsApp messages from Zoho CRM using Zoho Desk whatsapp templates. When creating new whatsapp template in Zoho Desk we can choose ticket related fields as variables but it's not clear how to use
    • In place field editing for candidates

      Wondering about any insight/best practices for efficiently updating candidate records while reviewing them in a Job Opening pipeline. We can do in-field editing (e.g. update job title or City) only when we have the full candidate record open, however
    • How do I see the total leads during a certain period?

      I understand I can get the count of leads and potentials but the total number of leads in a certain period should be equal to Leads+potentials because when we convert a lead it gets moved to potentials and no longer exists there. is there a way i could
    • Unable to Add Asset to Work Order Due to Different Contact and Company

      Hello Zoho Team, I’m facing an issue in our environment related to asset linking in Work Orders. Here’s the situation: When our engineers go for field activities, they initially create the Work Order using the salesperson’s contact details. After completing
    • Audio/video quality issues with Zoho Meeting – Any roadmap for improvement?

      Hi Zoho Team, We’ve been using Zoho Meeting for both internal and external meetings, and unfortunately, the experience has been consistently poor. The video and audio quality are so unreliable that it often renders meetings ineffective—especially with
    • Default tax type for mileage?

      Where we are, mileage includes a government tax. Is there any way to set a default tax for the Personal Car Mileage category of expense? (Or any other way?)
    • Analytics Portal

      I have the "standard plan" and want to explore the portal option; I activated the 15-day trial but do not see the pricing for the add-on. How can I get the price under "Upgrade add-ons." Thanks Rudy
    • 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
    • Show price book list price

      When using price books, once you add products to the price book in the Products related list you can display the Unit price which is the default list price; however, there is no option to show the price book list price. To see the price book list price
    • Zoho CRM - Scheduled Reports Which Contain Chart

      Hi Zoho CRM Team, I'm requesting that the Report Export and Scheduling feature be enhanced to include a chart, if one has been created on a report. At the moment I have a report which shows Sales This Week by Deal Owner and a pie chart at the top of the
    • Cliq File Upload

      While uploading large file like 500MB, it takes time, that fines. But if you resize window or move window in other screen, that uploading disappears. After upload complete & sent it will be visible
    • Resizing a Record Template Background Inage

      Hi everyone, I have an issue which I can't seem to resolve: Basically, I'm designing a record template in certificate form. I've specified A5 landscape. I've set my background image the same dimensions with total pixels at 443,520. Whatever I try, when
    • Analytics : How to share to an external client ?

      We have a use case where a client wants a portal so that several of his users can view dashboards that we have created for them in Zoho Analytics. They are not part of our company or Zoho One account. The clients want the ability to have user specific,
    • 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
    • Zia Actions: AI-powered Workflow Automation for Faster and Smarter Execution

      Hello everyone, Workflows got a notch better with AI-based actions. Actions such as field extraction, prediction, auto reply, and content generation facilitate quick execution with improved speed and accuracy. Zia can intercept useful details in newly
    • Constant color of a legend value

      It would be nice if we can set a constant color/pattern to a value when creating a chart. We would often use the same value in different graph options and I always have to copy the color that we've set to a certain value from a previous graph to make
    • What's New in Zoho POS - October 2025

      Hello everyone, Welcome to Zoho POS's monthly updates, where we share our latest feature updates, releases, changes, and more. Let’s take a look at how October went. Process returns for refunds, exchanges, or offer store credit Returns and exchanges can
    • Is it really true that I can't set the default 'deposit to' account in 2025?

      I've been using Books for 7 years and the default account has never been a problem. I usually manually reconcile invoices and have never had a thought about which account. It has always been my account. However, I recently noticed that for the past 4
    • Loan and purchase

      My husband is lending me mobey to buy a vehicle intersst free ... I need to know how to record the cash receipt and how I pay it back... the money is for a vehicle do I just post the invoice for that as I normally would usung the loan money to pay for
    • Zoho Connect Module in Zoho Trident

      Hi I really like where Zoho Trident is going. Having Mail and Cliq in one place is especially powerful. However, Zoho Connect really needs to be included to make this a true communication and collaboration hub. I would like to request that Zoho Connect
    • Zoho FSM API Delete Record

      Hi FSM Team, It would be great if you could delete a record via API. Thank you,
    • 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
    • File Field Validation

      Hello all, We are tracking our customer NDA agreements in our CRM and have created 2 fields to do so, an execution date field and a file upload field. I want to create a validation rule to ensure that when the execution date field is populated that the
    • 100 record view limitation

      I have just migrated from another CRM and am starting in ZOHOcrm with over 5000 contacts. It seems that my searches and sorts are limited to 100 live records....or am I missing something. This seems to be very limiting...in a lot of scenarios (mass email,
    • Fillable template with dynamic tables?

      Is there a way to build a fillable template so that users can add rows to a table? To describe what I'm trying to accomplish the table has 3 sections; a header row, some number of rows with custom information, and a summary row with totals. I can't figure
    • ZUG Meet-ups are back - Across India (December 2025)

      The Zoho User Group (ZUG) meet-ups are back, and this time, we’re travelling across India to reconnect with our amazing community! From Chennai to Delhi, Bengaluru to Mumbai, we can’t wait to meet you all in person and talk everything Zoho SalesIQ, automation,
    • 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
    • Scheduling a meeting for just a 1:1 phone call

      My business is B2C and many of my customer's don't want to engage in an online meeting for what can be handled in a regular phone call. I am trying to create a new meeting invitation, but there is no venue optoin for "phone call". How are other's handling
    • Need more details on API Usage Dashboard

      Hi Team, We have implemented Zoho Expense for a client and has done some integrations with well known third party ERP via api. Recently we have noticed a huge spike in the API consumption. But we couldn't get the root cause for the same. I accept there
    • Power of Automation:: Automating SLA Timelines for First Response & Resolution for Issues module.

      Hello Everyone, Ever wished SLAs could update automatically based on issue severity i.e no manual tracking, no missed timelines? That is exactly what one of our customers, Alex, wanted to achieve in the Issues module. So, we have setup a simple automation
    • Finding missing records

      I have a challenge and I am not really sure where to start with it. I can't find any similar threads on here, can anyone help: I have two forms, FormA and FormB. Both forms have records that contain a field called Job_Number. What I am trying to achieve
    • Power of Automation :: Quick way to associate your Projects with Zoho CRM

      A custom function is a software code that can be used to automate a process and this allows you to automate a notification, call a webhook, or perform logic immediately after a workflow rule is triggered. This feature helps to automate complex tasks and
    • Free webinar! Build smarter apps with Zoho Sign and Zoho Creator

      Hello, Bring the power of digital signatures to the apps you build in Zoho Creator! Connect Zoho Sign as a microservice and enable seamless e-signature workflows in your applications. This integration allows you to automate signing tasks using Deluge.
    • Tables improvement ideas / features

      Heya, I've been using Zoho Tables for a few months now and wanted to post some features that I think will be greatly beneficial for the tool: 1. Ability to delete a record in automation or move a record in automation. - Usecase: I move a record from one
    • Can I add Conditional merge tags on my Templates?

      Hi I was wondering if I can use Conditional Mail Merge tags inside my Email templates/Quotes etc within the CRM? In spanish and in our business we use gender and academic degree salutations , ie: Dr., Dra., Sr., Srta., so the beginning of an email / letter
    • Move orders scan ISBN

      Hi We have ISBN setup to be searched in items zoho but move orders dissent recognize the ISBN is there q missing configuration? regards, JS
    • What's New - October 2025 | Zoho Backstage

      Hey everyone! We’ve been busy rolling out a host of upgrades for Zoho Backstage. While some major features are still going through final rounds of testing to make your event experience smooth as butter, here’s what was new and improved in October 2025.
    • Next Page