Revenue Recognition

Revenue recognition shows the revenue you have earned in a month, not only the cash you collected. Under ASC 606 and IFRS 15, a subscription payment is earned gradually over the period it pays for. The report spreads every settled payment over its service period, keeps the unearned part as deferred revenue, and gives you the journal entries to post at month end. Open it in Dashboard → Reporting → Revenue recognition. All figures are in USD, by calendar month in UTC.

Why use it

Close the month on an accrual basis — see revenue earned in the month next to cash collected, with the difference explained.
Carry a deferred revenue balance — know how much collected cash is still owed as service, and when it will be earned.
Post summary journal entries — export one line per account pair per month instead of translating the summary by hand.
Explain revenue by plan — see which plans and billing periods drive booked, recognized, and deferred revenue.

How revenue is recognized

Every figure in the report follows these rules.

Only settled payments count. A payment enters the report when the processor settles it. Declined, failed, cancelled, and still-pending payments are excluded.
A payment is booked in the month it was authorized. Authorization is when the customer’s charge is approved and access begins. Until the funds settle, the amount is a receivable from the processor.
The service period starts on the authorization day and runs for the billing period of the subscription on the payment. A trial payment covers its trial period. A payment without a subscription period is a one-time purchase and is recognized in full on the authorization day.
Revenue is spread evenly per day over the service period and allocated to calendar months. Amounts are rounded to whole cents so the months of one payment always sum to the payment.
Tax is not revenue. Collected tax is shown separately as a liability. Tax returned to customers reduces that liability.
A refund reverses revenue from the refund date. The share already recognized becomes contra revenue in the refund month. The share not yet recognized is removed from deferred revenue in the same month.
Cash figures use the settlement date. The cash view shows what the processor settled in the month, including tax, less refunds settled in the month.

The report books no estimate for future refunds. It shows a suggested refund reserve as a memo so your finance team can decide whether to book one.

Worked example

A customer pays $29.99 for a 28-day plan on 20 August. The processor settles the payment on 22 August.


Service period	20 August to 16 September, 28 days
Revenue per day	$29.99 ÷ 28 = $1.071
August revenue	12 days = $12.85
September revenue	16 days = $17.14
Deferred revenue at 31 August	$17.14

On the cash basis, August shows $29.99 collected and September shows nothing. On the accrual basis, August earns $12.85 and September earns $17.14. If the customer is refunded on 1 September, recognition stops on that day. August keeps its $12.85. September shows refunds of $12.85, reversing the revenue already earned, and credits issued of $17.14, clearing the deferred balance. Together they reverse the full $29.99.

Period summary

The Period summary shows one month as a statement. Pick the month and the basis in the card title. The default is the last closed month on the accrual basis.

Accrual basis rows

Row	How it is calculated	What it tells you
Revenue from billings this month	Revenue earned this month from payments booked this month	New business earned right away
Recognized revenue previously deferred	Revenue earned this month from payments booked in earlier months	Service delivered on cash collected before
Refunds	Revenue already recognized on payments refunded this month, as a negative	Earned revenue given back
Net revenue	The three rows above added together	Your accrual revenue for the month
Tax collected	Tax settled with this month’s cash	Liability to tax authorities, not revenue
Tax refunded	Tax returned to customers on refunds this month	Reduction of the tax liability
Starting balance	Deferred revenue at the start of the month	Service still owed on the 1st of the month
Deferred change from new billings	Revenue of payments booked this month, before any of it is earned	Cash-backed service obligations added
Less recognized revenue	All revenue earned this month, from any booking month	Obligations fulfilled
Less credits issued	Deferred revenue removed by refunds this month	Obligations cancelled by refunds
Ending balance	Starting balance + new billings − recognized revenue − credits issued	Service still owed at month end
Processor receivable, ending balance	Payments authorized in this month, or an earlier month, that were not yet settled at month end	Revenue booked this month whose cash had not yet arrived

Only payments that have since settled are included, because the report counts settled payments only. An authorization that is still unsettled today appears in the pending settlement memo instead.

Cash basis rows

Row	How it is calculated	What it tells you
Cash collected	Payments settled this month, including tax	Money that reached your processor balance
Refunds	Refunds settled this month, including tax	Money returned to customers
Net cash	Cash collected − refunds	Your cash-basis revenue for the month
Tax collected	Tax settled this month	Liability to tax authorities
Tax refunded	Tax returned on refunds this month	Reduction of the tax liability
Ending balance	Deferred revenue at month end	Same balance as the accrual view

Pending settlement memo

Payments that are authorized but not yet settled appear in a memo section at the bottom of the summary. They are never part of the rows above.

Row	How it is calculated	What it tells you
Pending revenue (in flight)	Revenue that unsettled payments would earn this month if they settle	How much the month can still grow
Pending deferred (in flight)	Revenue of unsettled payments authorized this month that falls after month end	Deferred revenue waiting to be booked
Pending cash (in flight)	Gross amount of unsettled payments authorized this month	Cash expected from the processor

Use these rows to judge when a month is stable. When pending revenue for a closed month is close to zero, no material settlements are outstanding.

Suggested refund reserve

The last memo row estimates a refund reserve for the month. It multiplies the revenue booked this month by your average refund rate. The rate uses months booked at least 60 days ago, so their refunds have had time to arrive, and attributes each refund to the month its payment was booked. The row shows the rate used. Nothing is booked; whether to record a reserve is your accounting policy.

Cash vs accrual

The chart shows net cash as bars and net recognized revenue as a line. The table below it lists every month in the selected range.

Column	How it is calculated	What it tells you
Cash collected	Payments settled in the month, including tax	Money received
Refunds	Refunds settled in the month, as a negative	Money returned
Net cash	Cash collected − refunds	Cash-basis result
Recognized revenue	Revenue earned in the month from all bookings	Accrual revenue before refunds
Refunds (accrual)	Recognized revenue reversed by refunds in the month	Contra revenue
Net recognized revenue	Recognized revenue − refunds	Accrual-basis result
Pending revenue (in flight)	Memo, as in the Period summary	Not booked
Accrual minus cash	Net recognized revenue − net cash	Timing difference between earning and collecting
MoM net cash and MoM net recognized revenue	Change from the previous month in percent	Growth on each basis

A positive “Accrual minus cash” means you earned more than you collected, usually because earlier prepayments are being recognized. A negative value means you collected cash for service still to be delivered.

Revenue waterfall

The waterfall shows, for revenue booked in each month, how much was earned in every later month.

Column	How it is calculated	What it tells you
Booked month	Month of authorization	The cohort of payments
Total	Revenue booked in that month, net of tax	The cohort’s value
Month columns	Revenue from the cohort earned in each month	The recognition schedule
Recognized	Sum of the month columns inside the selected range	Earned so far
Remaining	Revenue from the cohort still deferred at the end of the range	Still to be earned

For a cohort without refunds, Recognized + Remaining = Total. Refunds reduce the month columns of the refunded payments, so for a cohort with refunds the difference to Total equals its credits issued.

Deferred revenue roll-forward

The roll-forward shows the movement of the deferred revenue balance month by month.

Column	How it is calculated	What it tells you
Starting balance	Previous month’s ending balance	Opening obligation
Deferred change from new billings	Revenue of payments booked in the month	Added obligation
Less recognized revenue	Revenue earned in the month	Fulfilled obligation
Less credits issued	Deferred revenue removed by refunds	Cancelled obligation
Ending balance	Starting + new billings − recognized − credits	Closing obligation
Receivable ending balance	Payments authorized in this month, or an earlier month, that were not yet settled at month end	Booked revenue whose cash had not yet arrived
Pending deferred (in flight)	Memo, as in the Period summary	Not booked

Future unwind of ending balance lists, month by month, when the current ending balance will be earned. It stops when the balance reaches zero.

Revenue by plan

Pick the month in the card title and choose to group by plan or by period. Grouping by period combines all plans with the same billing period, such as every 28-day plan.

Column	How it is calculated	What it tells you
Plan or Period	The subscription plan on the payment, or its billing period	Which product earned the revenue
Collected	Revenue booked in the month for this plan	New business by plan
Recognized revenue	Revenue earned in the month for this plan	Service delivered by plan
Refunds	Contra revenue in the month for this plan	Refund exposure by plan
Net recognized revenue	Recognized revenue − refunds	Accrual revenue by plan
Ending balance	Deferred revenue at month end for this plan	Obligation by plan

Payments without a subscription plan are grouped as One-time payments. The total row equals the Period summary of the same month.

Journal entries export

In the Period summary, open Export CSV and choose Journal entries (all months). The file contains one line per account pair per month for every month in the selected range. Zero amounts are skipped. Account names are placeholders; map them to your chart of accounts when importing.

Debit	Credit	Amount
`ProcessorReceivable`	`DeferredRevenue`	Revenue booked in the month, net of tax
`ProcessorReceivable`	`TaxLiability`	Tax on payments booked in the month
`Cash`	`ProcessorReceivable`	Cash settled in the month, including tax
`DeferredRevenue`	`Revenue`	Revenue recognized in the month
`Refunds`	`Cash`	Recognized revenue reversed by refunds
`DeferredRevenue`	`Cash`	Deferred revenue removed by refunds
`TaxLiability`	`Cash`	Tax returned on refunds

Lines for pending settlement carry memo=true. They describe authorizations still in flight and are not booked; exclude them when posting. Columns are accounting_period (YYYY-MM), debit, credit, amount (USD with two decimals), memo (true or false), and description.

accounting_period,debit,credit,amount,memo,description
2026-08,ProcessorReceivable,DeferredRevenue,29.99,false,"Billings booked at authorization, deferred (net of tax)"
2026-08,Cash,ProcessorReceivable,29.99,false,Cash settled by the processor (gross)
2026-08,DeferredRevenue,Revenue,12.85,false,Revenue recognized
2026-09,DeferredRevenue,Revenue,17.14,false,Revenue recognized

Close a month

Select the range

Choose a date range that ends after the month you are closing. The report defaults to the last 6 months.

Check pending settlement

In the Period summary, pick the month and confirm the pending settlement rows are close to zero. If not, wait for the remaining authorizations to settle or book the pending amounts as an accrual.

Reconcile the balances

Confirm the Period summary ending balance equals the roll-forward ending balance for the month, and that the Revenue by plan total equals the Period summary.

Export the journal entries

Open Export CSV → Journal entries (all months), keep the lines for the month you are closing, and drop the lines with memo=true.

Add what the report does not cover

Record disputes and chargebacks, processor fees, foreign exchange differences, and any refund reserve from your own sources before posting.

The report excludes disputes, chargebacks, processor fees, and foreign exchange differences between authorization and settlement. Add them from your processor statements before posting.

Filters and date range

The date range selects whole calendar months. The current month is included as month-to-date.
The payment filters on the Dashboard apply to every card.
Figures for the current and previous month can change until late-settling authorizations resolve. A payment is added when it settles and is booked back into its authorization month.

Introduction

Use Cases

Platform

Payments

Fraud Prevention

Advanced Features

Developers

Why use it

How revenue is recognized

Worked example

Period summary

Accrual basis rows

Cash basis rows

Pending settlement memo

Suggested refund reserve

Cash vs accrual

Revenue waterfall

Deferred revenue roll-forward

Revenue by plan

Journal entries export

Close a month

Filters and date range

​Why use it

​How revenue is recognized

​Worked example

​Period summary

​Accrual basis rows

​Cash basis rows

​Pending settlement memo

​Suggested refund reserve

​Cash vs accrual

​Revenue waterfall

​Deferred revenue roll-forward

​Revenue by plan

​Journal entries export

​Close a month

​Filters and date range

Why use it

How revenue is recognized

Worked example

Period summary

Accrual basis rows

Cash basis rows

Pending settlement memo

Suggested refund reserve

Cash vs accrual

Revenue waterfall

Deferred revenue roll-forward

Revenue by plan

Journal entries export

Close a month

Filters and date range