What is Revenue Recognition?

Revenue recognition is the process used to record the sale of services. Based on the revenue recognition methods you choose, there may not be a direct relationship between the timing of billing your customers and recognizing revenue.

The contract record defines parameters for revenue recognition. It is at the contract level that you choose the activity level and method of revenue recognition that you will use. You determine which activities you want to include in the revenue recognition calculation and which GL accounts and account categories will be updated during the process.