Create POB template

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Create POB template

Table of contents

Performance obligations templates are created based on both what goods and/or services that your company sells and how the company is expected to fulfill these performance obligations. Create one POB template for each revenue stream that you have for your company.

When a POB is partially recognized, the POB template also defines whether the POB should be treated as a series for contract modifications and how the partially recognized POB should be handled when there is SO value change or term change.

If you want to edit an existing POB template instead of creating a template, you must first end the current version of POB template by specifying an end date of the template. A new version will be created for you to make updates. This requirement is to ensure that the existing data is not impacted by your updates.

Procedure

Complete the following steps to create a POB template:

  1. Navigate to Policies > Performance Obligations.

  2. Click add-icon.png to create a POB template. The New POB Template window is displayed.

  3. Provide the following required information for the POB template and click save-icon.png.

    • A unique template name in the Name field.

    • The template effective start date in the Start Date field.

    • The revenue trigger event in the Release Event field. Manual, Upon Billing, and Upon Booking are by default provided.

    • The revenue treatment timing in the Ratable Method and Accounting Method fields.

  4. (Optional): Specify other fields for revenue treatment if necessary.

    • Specify whether the POB should be treated as series distinct for contract modifications by using the Series Distinct toggle switch.

      If a performance obligation contains a series of distinct goods or services, contract modification in transaction price will be accounted for on a prospective basis. If a performance obligation contains a series of non-distinct goods or services, contract modification in transaction price will be accounted for as cumulative adjustment if it has not been 100% recognized.

    • Specify whether SO value or term change is allowed for the POB by using the Allow SO Term Change toggle switch.
    • Enter a GL account in the Natural Account field.
    • When the revenue release event does not occur, specify the revenue treatment in the Expiry Details section.
  5. (Optional): Define the following information that is associated with the POB template and click save-icon-green.png on each tab.

    • In the Cost Treatment tab, enable the appropriate cost type to associate the cost with this POB template and specify the cost recognition pattern for each cost type. For more information, see Cost Processing.

    • In the VC Assignment tab, enable the appropriate VC rules for the POB template. For more information, see Variable Consideration Processing.

    • In the POB Dependency tab, add the parent POB template and specify the dependency type.

  6. (Optional): To apply a defined forecast type to this POB template, select the appropriate forecast template name in the Forecast Template field. For more information, see Forecasting.

  7. Save your configuration by clicking save-icon.png and close the Edit POB Template window.

The POB template is created and listed on the POB Templates page.

What to do next

The next step is to define the assignment rules for each POB template. For instructions, see Define POB assignment rules.

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