Zuora powers the revenue recognition used for the Z-Suite integration to NetSuite.
Many of the hardest challenges for revenue recognition are managed by Zuora, including the proration and calculation of the revenue recognition start and end dates.
Zuora has robust functionality where you can define a Revenue Recognition Code per Charge in the Zuora Product Catalog. Each Charge can also have a separate revenue recognition trigger date that can trigger revenue such as a recurring charge to start when the Service is activated.
Z-Suite has extremely powerful revenue recognition capabilities and powers all the information NetSuite needs to build the revenue schedule.
This article explains how you can recognize revenue using Zuora Z-Suite.
In the Zuora Product Rate Plan Charge, you can define the Revenue Recognition Code, which equates to the name of a Revenue Recognition Template in NetSuite.
You can also define the type of Revenue Template you are using in NetSuite:
Z-Suite supports both standard and variable Revenue Recognition Templates. And since these are on every charge, you can have one charge in a rate plan use a Variable Template and another use a Standard.
Variable Revenue Recognition is primarily used for milestone-based revenue recognition for projects, such as a fixed-price project.
When using Variable Template, the NetSuite Project Code entered on the Zuora Subscription is used as the project. If this field is not populated, the invoice will not be synchronized to NetSuite - so the recommended best practice is to create the project in NetSuite first, which will give you the needed project code.
When Variable is selected as the NetSuite Revenue Recognition Template Type and the NetSuite project is populated on the Zuora Subscription, the invoice will be synchronized to NetSuite using the Revenue Recognition Template and in NetSuite, the Revenue for the Invoice Item amount will be placed on hold.
In NetSuite, you can track the project, enter milestones and take the revenue off hold and recognize it.
Standard Revenue Recognition uses the start and end dates entered on the Product Rate Plan Charge.
You can define the Revenue Start and End Dates when you define your product catalog and automatically populate these dates based on what is entered on each subscription (Contract Effective, Service Activation, Customer Acceptance).
If you want to recognize each invoice item using the charge service period, which is common for straightforward recurring revenue, such as quarterly or annual billing, you would set the following:
If you want to use delayed revenue recognition where you invoice on contract effective and trigger revenue on either the Service Activation or the Customer Acceptance, you would set the following:
Z-Suite will automatically create the invoice in NetSuite on Contract Effective Date and will put revenue on hold in NetSuite if the Service Activation or the Customer Acceptance is not known. When these dates are entered, Z-Suite will automatically take the revenue off hold in NetSuite. Pretty cool stuff!
If you want to recognize a charge, such as a one time, using the subscription end date when you have to recognize a one time or professional services fee over the life of the subscription and not the service period, you would set the following:
Z-Suite will use the subscription end date as the revenue recognition end date and you can use this feature with delayed Rev Rec as well.
So, there it is. Z-Suite has extremely powerful revenue recognition capabilities and powers all the information NetSuite needs to build the revenue schedule.