Recognise revenue with Stripe

If you have subscriptions through Stripe Billing (such as monthly, quarterly and so on), no further setup is required. Stripe Revenue Recognition automatically recognises this revenue for you.

Stripe recognises the transaction amount by the service period for each invoice line item. By default, we recognise the revenue by the millisecond.

As an example, say you have a customer who started an annual subscription on 1 September for the price of US$365. If you want to recognise the amount monthly, your report at the end of December would show this:

No further setup is required if you have a usage-based billing metered event through Stripe Billing. Stripe Revenue Recognition automatically recognises this revenue for you.

As an example, say you have a customer on a pricing model where it costs US$1 per unit with a subscription for 100 units. They consume these units over multiple days and months as follows:

• 20 units on 2 March
• 25 units on 30 March
• 15 units on 1 April
• 25 units on 20 April
• 15 units on 28 April

In this case, the customer consumes a total of 45 units in March and 55 units in April without being billed. The ledger entries for this revenue recognition are as follows:

Billed usage-based metered event

Based on your configuration, Stripe creates an invoice for the consumed units that reflects the recorded usage.

To continue with the previous example, Stripe finalises an invoice on 1 April, for a total consumption of 60 units. At the end of the month, the journal entries appear as follows:

You can set up rules to automatically recognise your recurring revenue even if you don’t use Stripe Billing (but still use Stripe as a payment gateway).

As an example, say you receive two types of recurring payments from your customers: a US$10 payment and a US$120 payment. You need to recognise the US$10 payment over one month, and the US$120 payment over one year, so you create these revenue recognition rules:

Use more than one invoice item to structure a product bundle so you can recognise the revenue from more than one product. Each invoice item represents a different product with its own amount and service period.

You can create invoice items with these APIs:

• Invoice Items—Create an invoice item with a specific service period and amount. When you create an invoice, Stripe automatically includes the invoice items in the invoice for you.
• Subscription Schedules—Create a schedule for a subscription. You can add one-time invoice items to a subscription schedule that would show up in an invoice. This can be useful for one-time fees on a recurring service.

If you want to recognise revenue differently for any invoice item, import the recognition dates that Stripe should use.

As an example, say you offer a US$9 monthly service with a one-off setup fee of US$50. The invoices would look something like:

The revenue schedule would look something like: