When creating a product, you can set it up so that it has a revenue recognition method associated with it.
To set up a catalog product with an associated revenue recognition method, complete the following:
- In Stax Bill. on the left menu, click Catalog.
- From the Catalog Dashboard page, under Products, click Create Product.
- On the Create Product page, from the Product Type dropdown menu, select One-time charge.
- Enter the name of any other pieces of information in the appropriate fields.
- Under the Pricing section, activate the pricing toggle.
- Enter an amount for the price.
- Under the Accounting section, select a Revenue Recognition Method.
- Selecting immediate with earn on revenue when posted. Selecting Manual will place all revenue in deferred until it is manually earned.
- Selecting a fixed interval, you can enter the length of time to earn over the earning interval and at what point of the interval to earn. Earning at the end of the period is recommended as an ASC 606 best practice.
- Selecting Milestone, you will have additional options to set milestones or performance obligations. This method is best for ASC 606 compliance.
- Click Schedule to set up an earning schedule.
- On the Schedule Obligation page, you can set amounts and intervals of when and how much to earn.
- Once completed, you can click Preview to show the schedule and totals.
- Click Schedule to save the schedule. You can repeat till there is no remaining balance to be allocated.
- Click Save.
The Product has now been set up for a revenue recognition method. When the product is purchased, the schedule will be maintained. This can reduce repetitions and allows for more automation. However, you can override the schedule or make changes when adding the product to a customer.