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

In this example, the invoice and revenue periods are from 15 January 2019 to 14 February 2019. The 31 USD is recognised 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 recognised revenue increased by 17 USD for the days in January, and deferred revenue increased by 14 USD for revenue you expect to recognise in February.

Annual subscription

This example uses the following assumptions:

• On 1 January, 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 1 January 2019 to 31 December 2019. The 365 USD is recognised 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 1 April, at 00:00 UTC, a customer starts a monthly subscription that costs 90 USD.
• The subscription generates an invoice.
• The invoice finalises on 1 April and the customer pays 90 USD.
• On 21 April 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 finalised on 1 May at 00:00:00 UTC with 3 line items:
  • -30 USD for the unused time of the previous plan with the service period from 21 April at 00:00 UTC to 1 May at 00:00 UTC.
  • 40 USD for the remaining time of the new plan with the service period from 21 April at 00:00 UTC to 1 May at 00:00 UTC.
  • 120 USD for the service in May with the service period from 1 May at 00:00 UTC to 1 June 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 1 April, at 00:00 UTC, a customer starts a monthly subscription that costs 90 USD.
• The subscription generates an invoice.
• The invoice finalises on 1 April and the customer pays 90 USD.
• On 21 April 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 finalised on 1 May at 00:00:00 UTC with 3 line items:
  • -30 USD for the unused time of the previous plan with the service period from 21 April at 00:00 UTC to 1 May at 00:00 UTC.
  • 10 USD for the remaining time of the new plan with the service period from 21 April at 00:00 UTC to 1 May at 00:00 UTC.
  • 30 USD for the service in May with the service period from 1 May at 00:00 UTC to 1 June at 00:00 UTC.

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