Revenue recognition for usage based billingVersion bêta privée
Learn how Revenue recognition works with usage based billing.
The revenue recognition feature for usage based billing helps with the revenue recognition process for businesses that use usage-based billing models. It ensures that you recognize revenue that aligns with actual customer consumption, which can help provide accurate financial tracking and improved cash flow management.
Usage based metered event 
If you have a usage-based billing metered event through Stripe Billing, it requires no further setup. Stripe Revenue Recognition automatically recognizes this revenue for you.
As an example, say you have a customer on a price 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 2025-03-02
- 25 units 2025-03-30
- 15 units 2025-04-01
- 25 units 2025-04-20
- 15 units 2025-04-28
In this case, the customer consumed a total of 45 units in March and 55 units in April without being billed for them. The ledger entries for this revenue recognition would look like this:
| Month | Debit | Credit | Amount | Description |
|---|---|---|---|---|
| March | UnbilledAccountsReceivable | Revenue | 45.00 | Revenue in Mar from 45 usage units |
| April | UnbilledAccountsReceivable | Revenue | 55.00 | Revenue in April from 55 usage units |
Billed usage based metered Event
According to your configuration, an invoice is generated for the consumed units, including the recorded usage.
Continuing with the previous example, an invoice was finalizes on 2025-04-01, capturing the consumption of 60 units. At the end of the month, the journal entries would look something like this:
| Month | Debit | Credit | Amount | Description |
|---|---|---|---|---|
| March | UnbilledAccountsReceivable | Revenue | 45.00 | Revenue in Mar from 45 usage units |
| April | UnbilledAccountsReceivable | Revenue | 55.00 | Revenue in April from 55 usage units |
| April | Revenue | UnbilledAccountsReceivable | 60.00 | The reversal of revenue with the April invoice for billed usage units. |