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Revenue Schedules

Revenue schedules show the distribution of revenue into accounting periods and track when revenue is recognized. This article explains the basic concept of a revenue schedule. This article also explains how revenue schedules are created and how revenue is distributed.

What is a Revenue Schedule?

A revenue schedule represents how revenue amounts from a single charge are distributed over time and recognized in accounting periods. 

A revenue schedule has a one-to-one relationship with a subscription charge – one charge per revenue schedule. 

Revenue schedules maintain consistency with the currency used. 

The following is an example of a revenue schedule that was auto-created on a subscription charge when revenue is recognized daily over time.

Revenue Schedule Showing Daily Distribution in Accounting Periods for a Subscription Term

Basic Information

Basic information associated with the schedule. This includes the following:

  • Customer account
  • Subscription
  • Subscription charge. Click view Charge Revenue Summary to access a distribution summary of all revenue schedules associated with the subscription charge. See Charge Revenue Summary for more information.
  • Recognition rule
  • Information specific to the revenue schedule, such as the date the schedule was created, the revenue schedule amount, the invoice, and any notes. 

Revenue Schedule

Summary Information
  • Revenue schedule amount: The total amount of revenue to be recognized and distributed into accounting periods. This amount is equal to the sum of recognized revenue plus the sum of distributed, unrecognized revenue and undistributed, unrecognized revenue.
  • Recognized revenue: Revenue in accounting periods that are closed. Revenue is recognized immediately in Zuora when accounting periods are closed.
  • Distributed unrecognized revenue: Revenue distributed into open accounting periods. Revenue categorized as distributed unrecognized can be modified.
  • Undistributed unrecognized revenue: Any revenue not distributed into accounting periods is held in an undistributed, open-ended accounting period.

See the Revenue Distribution and Accounting Periods section later in this article for more information on open, closed, and open-ended accounting periods. 

Revenue Distribution Chart

The revenue schedule shows how revenue is distributed across accounting periods.

  • Revenue items: A revenue item shows the amount of revenue distributed into an accounting period. A green bar indicates a positive revenue amount and a red bar indicates a negative revenue amount, such as a credit adjustment.
  • Accounting period: The accounting periods for the the term of the subscription. Revenue in an open accounting period is unrecognized. Revenue in a closed accounting period is recognized. A gray background indicates a closed accounting period.

Revenue Events

This section is an audit trail of the revenue events that cause a change to the revenue schedule.  See Revenue Events for more information about revenue events and revenue event types.

  • Date: When the revenue event occurred
  • Revenue Event Type: The type of event, such as Invoice Created or Revenue Distributed
  • Recognition Start and Recognition End: The recognition term for the revenue event

How Revenue Schedules are Created

A revenue schedule is generated on a subscription charge for a specified service period. The following shows the process flow to auto-create or manually create a revenue schedule on a charge:Process Flow shows when a revenue schedule is auto-created or manually created based on the rule, posted invoice, and transactiion

The following tables summarizes key drivers for revenue schedules.

Object Summary Rule Posted Invoice Transaction-driven Auto-Created Revenue Schedule

Invoice Item

An auto-created revenue schedule has an indirect association with a subscription charge through the invoice item.

An invoice item is the most common transaction type when creating revenue schedules.

Any billing-based rule

Required

Check Mark

Check Mark

Invoice Item Adjustment

An auto-created revenue schedule has an indirect association with a subscription charge through the invoice item adjustment, which is also tied to an invoice item.

Any billing-based rule

Required

Check Mark

Check Mark

External Entity or Transaction

A manually created revenue schedule has a direct association with a subscription charge, but no transaction occurs.

When manually creating a revenue schedule, associate the external entity or transaction by defining a Transaction ID.

Custom unlimited

Not Required

File:Z_Media/xmark.png

File:Z_Media/xmark.png

For manually creating revenue schedules for subscription charges, see Manually Create Revenue Schedules for Subscription Charges.

For manually creating revenue schedules for invoice items and invoice item adjustments, see Create Revenue Schedules for Existing Transactions.

Taxation Support

Currently revenue schedules are not supported for taxation on Invoice items and invoice item adjustments.

Subscription Amendment

A subscription amendment is indirectly tied to a revenue schedule. The effect of a subscription amendment appears on revenue schedules after new invoices are generated and posted. In most cases, subscription changes are handled automatically. See How Amendments Impact Revenue Schedules for an example.

Revenue Distribution and Accounting Periods

Revenue distribution is the core driver behind a revenue schedule. Revenue is scheduled for distribution based on the rule applied to a product rate plan charge and on the dates and durations of your accounting periods. 

Revenue is distributed into accounting periods. Zuora recommends creating at least five years of accounting periods. The maximum number of accounting periods that you can distribute revenue into is 250 (approximately 20 years).

The following accounting period statuses determine if a revenue amount can be distributed into an accounting period:

  • Closed: Revenue cannot be distributed in a closed accounting period. 
  • Open: Revenue can be distributed and distribution can be modified.

Open-Ended Accounting Period

The Open-Ended accounting period is a container for all undistributed revenue. The start date of the Open-Ended accounting period is always the day after the end date of the most recent accounting period. Revenue is placed into the Open-Ended accounting period in the following scenarios:​

Revenue Amounts Held in the Open-ended Period

Any remaining revenue held in the open-ended period must be distributed at some point into open accounting periods.

If you are manually distributing revenue, the revenue schedule amount must equal the sum of the distributed revenue amounts in accounting periods. Once you create a revenue schedule, you cannot change the revenue schedule amount.​ Before you save the revenue schedule check for the following:

  • If the sum of the distributed revenue is less than the revenue schedule amount, the remaining balance remains in the open-ended accounting period.
  • If the sum of the distributed revenue amount is greater than the revenue schedule amount, a negative revenue amount  remains in the open-ended accounting period.  If you would like to adjust the amount, create another revenue schedule with a positive or negative amount that you would like to modify.
  • If accounting periods are not created for the recognition term, the remaining revenue is automatically held in an open-ended accounting period. For example, you have a one-year recognition term, but only have accounting periods for 6 months. The remaining six months of revenue is held in an open-ended accounting period. 

Revenue Items and Zero Revenue Amounts

A revenue item is created to track a revenue amount change in an accounting period. Zero revenue amounts are handled differently depending on how the revenue schedule is created:

  • For auto-created revenue schedules: A revenue item is always created – even when a zero revenue amount occurs in the accounting period. This can occur under the following condition when the revenue schedule amount is:
    • A zero dollar amount.
    • A very small, such as a fraction of a dollar amount, and is rounded down to zero after revenue is distributed into the accounting periods. For example, if the revenue schedule amount is $0.05 and distributed into 12 accounting periods – equaling less than $0.005 – a fraction of a penny – revenue reported in each accounting periods is rounded down to a zero dollar amount. 
  • For manually created revenue schedules: A revenue item is not created when a zero revenue amount occurs in an accounting period. 
Last modified
23:00, 4 Nov 2015

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