Revenue Recognition Rules for SuiteBilling

Note:

The information in this topic applies whether you check the Create Revenue Elements for Subscription Revisions accounting preference, except where the accounting preference is clearly identified.

NetSuite has the following default revenue recognition rules for SuiteBilling. You select revenue recognition rules on the item record. For more information, see Configuring Subscription Items for Revenue Recognition and Creating Items for Subscription Plans.

The following table matches the revenue recognition rules to the rate plans of the subscription line types:

Subscription Line Type	Revenue Recognition Rule
Recurring – Adjustable	Depends on whether the Create Revenue Elements for Subscription Revisions accounting preference is checked: When checked, use Default Fixed Recurring Fee When clear, use Default Adjustable Recurring Fee
Recurring – Fixed	Default Fixed Recurring Fee
One Time	Default Fixed Recurring Fee
Usage	Default Usage
Commit Plus Overage	Commitment: Default Adjustable Recurring Fee – When revenue should be spread evenly but be based on each usage event Default Fixed Recurring Fee – When revenue should be spread evenly regardless of the usage events created Default Usage – When revenue should recognize only when a usage event was created or is used at the end of each period Overage: Default Usage

You can rename these default revenue recognition rules, but you can't change their settings. The default values for these fields are in the following table. For more information about the revenue recognition rules, see Revenue Recognition Rules.

Revenue Recognition Rule	Recognition Method	Amount Source	Rev Rec Start Date Source	Rev Rec End Date Source
Default Adjustable Recurring Fee	Straight-line, prorate first and last period (period-rate)	Event-Percent based on amount	Subscription Event Start Date	Subscription Event End Date
Default Fixed Recurring Fee	Straight-line, prorate first and last period (period-rate)	Event-Percent based on amount	Revenue Element Start Date*	Revenue Element End Date*
Default Usage	Straight-line, prorate first and last period (period-rate)	Event-Percent based on amount	Event Date	Event Date

*

To generate revenue plans using these values, you usually enter the Start Date and End Date in the revenue element. However, when the revenue element source is a subscription, these dates are automatically taken from the subscription lines. For evergreen subscriptions, there is no end date, so the Estimated Revenue Recommended End Date field on the subscription header is used instead.

SuiteBilling's default revenue recognition rules don't use Event-Percent based on quantity as the amount source. This amount source isn't suitable for SuiteBilling.

When the credit memo doesn't have a linked subscription charge, the item record's revenue recognition rule is ignored. Instead, Advanced Revenue Management (Essentials) uses the rule you select with the Default Standard Revenue Recognition Rule accounting preference to generate the revenue plan for the credit memo line. For information about accounting preferences for revenue recognition, see Setting Advanced Revenue Management (Essentials) Preferences.

Usage service line types don't create revenue plans until the bill run is executed because usage is calculated during the rating process. Forecasting and reforecasting aren't available for subscription lines with usage. For information about reforecasting, see Recalculating Revenue Forecast Plans.

Recognition Treatment Rules for SuiteBilling

A recognition treatment rule sets the criteria for applying a recognition treatment to a revenue element. Each rule must specify a recognition treatment. The treatment rule look-up process checks the rules to see if a recognition treatment should be applied to a revenue element.

For each treatment rule, you can define criteria using these subscription line types:

• Commit

• Overage

• One-Time

• Recurring

• Usage

After treatment rules are set up, if the criteria match for each revenue element generated, the treatment rules override the item setup. This allows for different treatment rules between each type of element generated.

Note:

When using commit plus overage subscription line types, it's key to use treatment rules with any rule except default usage.

Commit Plus Overage Charges

You can use the commit plus overage line type to charge in advance for a set number of committed usage units per period at a specific price. Any additional units over the committed quantity are charged at a different price as overage.

The commitment charge period and overage charge period can differ, such as an annual commitment with monthly overage. Overage can't have a charge period greater than the commitment charge period.

Commit plus overage arrangements can be prospectively merged when using delta element functionality.

Related Topics

• Revenue Recognition for SuiteBilling
• Configuring Subscription Items for Revenue Recognition
• Revenue Allocation for One-Time and Recurring Subscription Lines
• Revenue Recognition and Prepay with Drawdown
• Example of Prepay with Drawdown and Revenue Recognition
• Configuring Subscription Items for Revenue Recognition

General Notices