Stax Bill generates revenue recognition journal entries based on schedules for each charge posted. In general, it is to recognize revenue as services are being provided automatically. It is an automated process and has no way to manually trigger if services are provided at a later date or time.
Revenue records in Stax Bill do not take place when an invoice is paid, it is instead recognized
These schedules are based on the revenue recognition rules defined when generating a charge as ready or posted.
These rules are on subscription products, and on purchases. The rules defined on those subscription products and purchases come from the plan products and products in the catalog.
Once a charge is generated as ready or posted, the schedules cannot be changed or corrected. Stax Bill is only acting as a method for generating those additional entries and reporting on what has been generated. Corrections cannot be made.
Reversing a charge, cancelling a subscription, and issuing a write-off will affect revenue entries.
Among the product types:
"Physical goods" will always earn immediately
"One-time fees" can be customized to have specific revenue recognition schedules. These can be customized:
- in the catalog product details
- overridden on a purchase for a customer before that purchase is finalized/purchased/completed
- overridden in the catalog on a plan for the plan product in that plan
- overridden on a customer, in a subscription, on the subscription product, but it will not affect existing ready or posted charges from that subscription product.
Revenue overviews and summaries are available as "pillar" report sections.
Revenue details and schedules of existing charges can be found in the monthly closing earned and deferred revenue exports:
All the individual transactions following those revenue recognition cycles can be found in the Reconciliation report details export.
Be sure to select "Detailed Transactions" and "Include Earning."
Note that this will add a significant number of rows if products are set to earn daily, so selecting a shorter date range is advised and avoiding including any additional Customer Fields is advised. This will keep processing time and file size low.
Revenue recognition starts when a charge is fully posted.
It will compare it against the schedule set when the charge was generated as ready or skipped to be automatically posted.
When a charge is posted, these transactions are visible in the export of the reconciliation report.
- An entry indicates changes in the customer's AR Balance and deferred revenue.
- If the charge is set to earn at the start of the period for earning intervals, it will cross-reference against the schedule and immediately earn to catch up to that schedule (for instance, if the invoice was in ready draft for a prolonged period).
- That earning action generates an entry indicating changes to the deferred and Earned revenue.
If the account has the option to "Earn in previous period" for end-of-period charges
- When an end-of-period charge is posted automatically while auto post is enabled.
- The earned revenue entry will be recorded as earned at 23:59:59 of the previous day.
- In this way, an end-of-period charge for a service provided in a previous period can be recorded as having been earned in that period.
- It can be confusing since the charge will be posted the following day. So this may cause some confusion between Sales and Revenue reporting. The sale took place in one period, and the revenue for it took place in the period before.
When a product is set to "Earn at start of interval" each interval (daily, monthly) will record that interval's revenue entries according to the day that will pass. Effectively stating, "Services are being provided for today."
- For example, if I have a subscription service that is a start of period charge for January 1-31
- Set to earn at the start of the interval, daily
- Then on January 1, when my charge is posted
- I will have an entry for the charge posted on AR Balance and Deferred Revenue
- I will immediately have an entry for January 1 for that one day, with 30 days of deferred revenue remaining for that charge
When a product is set to "Earn at the end of interval," each interval will pass before revenue entries are recorded.
- When I have a start of period charge
- Set to earn at the end of the interval, daily
- On January 1, when my charge is posted for 1-31,
- I will have an entry for the charge posted on AR Balance and deferred revenue.
- After January 1 has passed (on January 2), I will have an entry for the revenue from January 1 of Deferred revenue and Earned revenue.
When a subscription is cancelled, the user can:
- Reverse all charges fully
- Reverse unearned amounts
- Earn remaining deferred revenue
- Reverse unearned amounts will take anything left in deferred revenue for the charges associated with that subscription, reverse that amount from the existing charge, and any associated taxes and discounts.
- Earn remaining deferred revenue will immediately move all the deferred revenue of the related charges to earned revenue.
- The option to avoid reversing unearned amounts or affecting existing earning schedules is to set existing subscriptions to expire in 0 periods so they can conclude their natural cycle.
When a write-off occurs:
- Stax Bill immediately dumps all of the Deferred revenue into Earned revenue
- This includes partial write-offs
- Then another entry is written for AR Balance and Write-offs