The answer changes with the model — a signed contract, a subscription earned month by month, usage measured in compute minutes, a milestone on a long-term project. Getting it right means matching the method to the model, then proving it with data.
Every engagement starts by identifying which model — or mix of models — actually applies, because each one answers "when is this earned?" differently.
Revenue tied to defined deliverables in a signed agreement. Recognition follows completion of specific, identifiable performance obligations.
Revenue earned ratably over the life of the term — a customer pays upfront or monthly, but the revenue is recognized in slices as service is delivered.
Revenue tied to consumption — compute minutes, transactions, API calls. Recognition depends entirely on accurate usage data, not the invoice date.
Revenue on long-term projects recognized as defined milestones are completed and verified, rather than on a fixed schedule.
The accounting judgment is only half the job. The other half is making sure the calculation that runs in your systems actually reflects that judgment — correctly, consistently, and in a way that traces back to real source data.
That's the part most engagements miss: a recognition policy that's correct on paper but drifts from what the system actually calculates, because the logic was never fully translated into the pipeline that produces the numbers.
Most organizations have more than one revenue stream, and they don't all recognize the same way. Let's talk through what you have.
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