Subscription examples

Unless stated otherwise, these subscription examples assume that revenue recognition takes place on a per-day basis.

Monthly subscription

This example uses the following assumptions:

• On January 15, at 00:00:00 UTC, a customer starts a monthly subscription that costs 31 USD.
• The subscription generates an invoice.
• The invoice finalizes and the customer pays 31 USD.

In this example, the invoice and revenue periods are from January 15, 2019 to February 14, 2019. The 31 USD is recognized across 17 days in January and 14 days in February. If you looked at the summary after January ends, you might see something like:

This means that recognized revenue increased by 17 USD for the days in January, and deferred revenue increased by 14 USD for revenue you expect to recognize in February.

Annual subscription

This example uses the following assumptions:

• On January 1, at 00:00:00 UTC, a customer starts an annual subscription that costs 365 USD.
• The subscription generates an invoice.
• The invoice finalizes and the customer pays 365 USD.

In this example, the invoice and revenue periods are from January 1, 2019 to December 31, 2019. The 365 USD is recognized daily throughout the year. If you looked at the summary after March ends, you might see something like:

Upgrade

This example uses the following assumptions:

• On April 1, at 00:00 UTC, a customer starts a monthly subscription that costs 90 USD.
• The subscription generates an invoice.
• The invoice finalizes on April 1 and the customer pays 90 USD.
• On April 21 at 00:00 UTC, they upgrade to a monthly subscription that costs 120 USD.
  • Two unbilled invoice items are created to represent (1) -30 USD for the unused time of the previous plan and (2) 40 USD for the remaining time of the new plan.
• The next invoice includes the two unbilled invoice items and is finalized on May 1, at 00:00:00 UTC with 3 line items:
  • -30 USD for the unused time of the previous plan with the service period from April 21 at 00:00 UTC to May 1 at 00:00 UTC.
  • 40 USD for the remaining time of the new plan with the service period from April 21 at 00:00 UTC to May 1 at 00:00 UTC.
  • 120 USD for the service in May with the service period from May 1 at 00:00 UTC to June 1 at 00:00 UTC.

If you looked at the summary after May ends, you might see something like:

Downgrade

This example uses the following assumptions:

• On April 1, at 00:00 UTC, a customer starts a monthly subscription that costs 90 USD.
• The subscription generates an invoice.
• The invoice finalizes on April 1 and the customer pays 90 USD.
• On April 21 at 00:00 UTC, they downgrade to a monthly subscription that costs 30 USD.
  • Two unbilled invoice items are created to represent (1) -30 USD for the unused time of the previous plan and (2) 10 USD for the remaining time of the new plan.
• The next invoice includes the two unbilled invoice items and is finalized on May 1, at 00:00:00 UTC with 3 line items:
  • -30 USD for the unused time of the previous plan with the service period from April 21 at 00:00 UTC to May 1 at 00:00 UTC.
  • 10 USD for the remaining time of the new plan with the service period from April 21 at 00:00 UTC to May 1 at 00:00 UTC.
  • 30 USD for the service in May with the service period from May 1 at 00:00 UTC to June 1 at 00:00 UTC.

If you looked at the summary after May ends, you might see something like: