Revenue Recognition for usage-based billingPrivate preview

The Stripe Revenue Recognition feature for usage-based billing helps with the revenue recognition process for businesses that use usage-based billing models. It allows you to recognise revenue that aligns with actual customer consumption, which can help provide accurate financial tracking and improved cash flow management.

Usage-based metered event

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 1 USD 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: