Revenue Schedule Reconfiguration: Recurring Billing

The Revenue Schedule Reconfiguration feature for recurring billing enhances how recurring revenue is tracked and managed in the system. This feature creates a direct relationship between billing and revenue schedules for recurring charges, ensuring they remain perfectly aligned throughout the billing cycle. By tying each billing schedule line to its corresponding revenue schedule, the system now follows accounting best practices more closely and provides greater visibility into your financial data.

This feature is currently available in Beta. Contact Ordway Support to enable it for your account.

Key Features

Company-Level Revenue Allocation Setting

A new company-level setting allows you to enable revenue calculation per billing line for recurring charges. This transitions away from the traditional TCV-based allocation method to provide more granular revenue tracking aligned with individual billing lines.

Enhanced Recurring Revenue Schedule Layout

When the new setting is enabled, the revenue schedule interface displays revenue allocation for each individual recurring billing line, providing clear visibility into how each billing line contributes to revenue recognition.

Billing Line Revenue Mapping

The Revenue Allocation feature shows how revenue from each recurring billing line is distributed across the corresponding revenue periods. This establishes a direct relationship between Billing Schedule Lines (BSL) and Revenue Schedule Lines (RSL), tracking the exact amount contributed by each BSL to period revenue.

Billing Details on Revenue Schedule Page

The Billing Details section on the revenue schedule page displays the amount contributed by billing lines for each specific revenue period, creating a complete picture of your recurring revenue sources and their allocation across periods.

Track User Edits

The system now tracks all user edits along with the source of the edit (UI, Import, API) on:

• Billing lines (unit price, quantity, discount, new lines)
• Revenue lines (changes in period revenue)

If the system recalculates values automatically, tracking details will be reset.

Automatic Revenue Adjustment for Recurring Charges

When a billing line for recurring charges is manually modified, the system will automatically adjust the corresponding revenue to maintain alignment between billing and revenue schedules. This ensures that contract changes and manual edits to billing lines only update revenue for associated periods.

Multi-Period Revenue Allocation

The system can now allocate recurring revenue across multiple revenue periods based on the billing period duration, ensuring accurate revenue recognition that matches your billing cycles.

Audit Logging

All changes and updates are logged, providing a comprehensive audit trail for compliance and tracking purposes.

How It Works

Recurring Charges

For recurring charges, the system creates a link between Billing Schedule Lines (BSL) and Revenue Schedule Lines (RSL) for a given period, storing the amount contributed by each BSL to the corresponding RSL.

When recurring billing data changes through:

• Contract changes
• Manual edits to billing schedule lines
• Pricing modifications
• Quantity adjustments

The system automatically updates the related revenue schedules to maintain alignment, updating only the revenue for associated periods.

Revenue Calculation Logic

The revenue calculation logic for recurring charges works as follows:

For Recurring Charges:

• Per-period revenue = BSL amount / Month Difference (BSL end date - BSL start date)
• This value represents MRR (Monthly Recurring Revenue) or close to MRR
• For every Revenue Line with posting date between BSL start and BSL end date:
  • Amount = Active RSL Month × per_period_revenue

For One-Time Charges:

• Per-period revenue = BSL amount / Month Difference (charge end date - charge start date)

The system creates or updates entries in the billing_by_revenue table and performs adjustments after reading all associated entries, ensuring accurate allocation across all relevant periods.

How to Use This Feature

Enable the Feature

This feature is controlled by a company-level setting in your finance configuration. The setting transitions your revenue recognition from TCV-based allocation to billing line-based allocation for recurring charges.

Important: This setting cannot be changed once enabled. Contact Ordway Support to enable it for your account.

Viewing Revenue Allocation for Recurring Charges

• Navigate to the Billing Schedule Page
• Select a Billing Schedule Line (BSL) for a recurring charge to view the associated Revenue Allocation
  
  
• Click on the Revenue Allocation section to see how recurring revenue is distributed across periods
  
  

Viewing Billing Details on Revenue Schedule Page

• Navigate to the Revenue Schedule Page
• Select a Revenue Schedule Line (RSL) to view the associated Billing Details
  
  
  
  
• Review how each billing line contributes to the total revenue for each period
  
  

Editing Recurring Billing Lines & Auto-Adjusting Revenue

• Go to the Billing Schedule Page and select a recurring billing line
• Update the unit price, quantity, discount, or billing period
• The system will automatically adjust the revenue allocation for the corresponding periods

A prompt displays notifying you that the system will automatically adjust the revenue based on the changes made to recurring billing schedule line(s).

An icon will be shown next to the Amount for the Billing Schedule line indicating that the line has been edited by the user. The audit log will show who made the change and through which method (UI, Import, API).

Editing Revenue Allocation

From the Billing Schedule page, you can click on the view under the revenue allocation column for a particular recurring billing schedule line to manually adjust and allocate revenue to different periods.

Editing this allocation will auto-adjust the period revenue to maintain consistency across your revenue recognition.

Requirements and Constraints

• Finance Module Required: The Finance module must be enabled for this feature enhancement
• Setting Permanence: The company-level setting cannot be changed once enabled
• Contract Compatibility: The same logic applies to both termed and evergreen contracts
• Revenue Period Alignment: Currently works with revenue start and end dates that match billing start and end dates

Migration

When this feature is enabled, existing recurring revenue schedules will be migrated to the new billing line-based allocation method. This migration is designed to be seamless and maintain data integrity.

Benefits

• Improved Accuracy: Revenue recognition now directly aligns with individual billing lines
• Better Visibility: Clear tracking of how each recurring billing line contributes to revenue
• Accounting Compliance: Follows accounting best practices for revenue recognition
• Automated Adjustments: Revenue automatically updates when billing changes occur
• Comprehensive Auditing: Full audit trail of all changes and their sources