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Key Revenue Recognition Reporting Functions in Salesforce Billing
When you’re working with revenue recognition reporting in Salesforce Billing, review important functions. (Salesforce Billing Managed Package)
Required Editions
| Available in: All Salesforce Billing Editions |
- Revenue Extensions to the Standard CPQ Product Catalog
- Salesforce Billing adds revenue recognition rules, treatments, and distribution methods to support your Salesforce CPQ product catalog.
- Order-Based Revenue Recognition for Forecasting
- Order-based revenue recognition reporting lets you track and earn revenue throughout an order product’s lifecycle, regardless of its invoicing activity. Order-based revenue recognition reporting policies are often used when service delivery begins before or after invoicing.
- When you generate revenue upon order product activation, you get high visibility into a company’s future revenue streams. Creating revenue schedules based on order products forecasts your future deferred revenue liability for the life of a performance obligation. This forecasting allows businesses to view accurate revenue forecasts up-front for one-time and recurring products.
- Billing-Based Revenue Recognition
- Recognizing revenue on the invoice line is ideal for basic pro-rata recognition of subscription revenue. Invoice-based recognition creates revenue schedules that mirror the service period or periods invoiced and take revenue evenly throughout the period of performance. If the amount of revenue earned isn’t equal to the amount billed, you can also use custom revenue amounts. In addition to pro-rata recognition, you can use invoice plans to create custom invoice schedules. Custom invoice schedules are often used for milestone billing and revenue recognition.
- Recognizing revenue on credit note lines is necessary for adjustment scenarios including credit and rebilling, write-offs, and SLA credits. When you use the Cancel & Rebill button to cancel an invoice, Salesforce Billing creates credit notes to reduce the invoice line’s balance to zero. To recognize revenue information accurately in this case, you’ll need to offset previously recognized revenue using revenue recognition treatments and distribution methods.
- Order and Invoice Revenue Recognition
- Salesforce Billing lets you configure a product with a revenue recognition rule that tracks revenue on both the order product and its related invoice line. This setup helps split revenue pipeline forecasting from the actual revenue reporting process. You can configure this setup by creating a rule with two unique revenue recognition treatments, each associated to its own revenue distribution method. Salesforce Billing then creates one revenue schedule for forecasting when an order product is activated, and another schedule for reporting when the related invoice line posts.
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