5 Step Process of Revenue Recognition Model: Things to Know
Revenue is the most critical indicator of how the company performs, but complicated contracts and flexible buying choices can make it very difficult to control revenue. The moment cash arrives from a customer in your bank account, it can be very tempting to refresh your sales line with all that sweet, sweet cash in your accounts immediately. But cash isn't sales and it may be disastrous for your company to treat them the same. You may get cash up front but you're not getting money until you receive it. Before then, it's a liability — money your client will apply for back at any point if you don't offer the service. If you spent their money but did not deliver their service, it will spell the end of your Saas Metrics quickly. This is the concept of revenue recognition software and for every SaaS founder to understand it is absolutely critical. Recognition of new revenue model The Contract Revenue Guidelines for Customers establish a 5-phase process for the re...