Premium Report - Revenue Recognition

Revenue Recognition/Revenue Recognition Detail

Revenue Recognition reports are used for financial reports in accrual based accounting.

For businesses that operate under this system, it's important to know what constitutes revenue.

1. If order is canceled = No
2. If Sale and a gift card, = No
3. If other Sale, = Yes
4. If Shipping, = Yes
5. If a Refund and no product (i.e. Order Adjustment), = Yes
6. If a Refund and a product that was fulfilled (including Custom Sales), = Yes
7. Otherwise = No

Once we've determined that we have revenue (see above), we must then decide the Revenue Date (WHEN it should be recognized).

This uses the following rules:

1. If a Sale = Use Fulfilled At (fulfillment date of the individual line item)**
2. If Shipping = Use Order_fulfilled_at (fulfillment date of the entire order)
3. If a Refund = Use latter of Created_at for the Refund Line (when Refund was created) OR fulfilled_at (fulfillment date of the individual line item).***
4. Otherwise, leave blank (it doesn't represent revenue)

Report Toaster has several Revenue Recognition reports, including one for the Summary and the Details.

Let's take a look at the Revenue Recognition Detail report (click to zoom)

There are a few main terms to understand for Revenue Recognition reports.

1.) Created at: When each order line was created.

- For an item's sale and shipping, this is usually the date and time of the order.

- For the Refund, this is usually the date/time when the refund is created.

**2.) Type:**The type for each line on the order. The possible values here are Sale, Refund, Shipping, Payment, and Credit (with the first 3 being the most significant in this context).

**3.) Order Fulfilled at:**When the order as a whole was fulfilled. This is left blank until the whole order is marked with a Fulfillment Status equal to Fulfilled.

4.) Fulfilled at: When the individual line item is fulfilled. This is left blank for Shipping (which isn't a line item) or for Refunds that don't apply to a Fulfilled Order Line Item.

5.) Revenue Date: The date and time when the revenue was recognized. Note that for any rows where the Revenue Date is blank, this is because the revenue has yet to be recognized (above).

If you're looking for more of an overall summary, grouping all of your revenue across multiple orders according to the revenue date (above) then check out our Revenue Recognition summary report:

Like all Report Toaster reports, these reports are fully customizable - so you can adjust the date range, add/remove columns, introduce a filter or change the sort to suit your individual needs. See our basic guides here for more info.