Synder revenue recognition module works with Stripe and provides complete GAAP-compliant revenue recognition of Stripe subscriptions. One challenge Synder clients face with Stripe is that invoices meant to be deferred and recognized over a service period are sometimes created in Stripe as one-off invoices. As a result, Stripe doesn’t assign a service period, causing Synder to send the invoice directly to the income account instead of deferred revenue.
You can change your sales flows to make sure all the invoices are sent over properly. Then, Synder will automatically detect the necessary information in the Stripe and properly defer the invoice. However, if this is not possible, you can use Synder to define the rule and assign service periods for one-time invoices. This guide will show you how to assign a service period for the one-off Stripe invoices, so that Synder can properly process them.
Overview:
- How to differentiate between one-time and recurring invoices in Stripe?
- How to assign a service period (recognition period) for a one-time invoice?
How to differentiate between one-time and recurring invoices in Stripe?
You can easily determine if the invoice is subscription-related or not by following the below steps:
1. Go to your Stripe account → ‘Invoices’.
2. Open the invoice in question.
3. If it has a service period → it is a recurring invoice → it will go to Deferred Revenue. If it does not have a service period → it is a one-time invoice → it will go to Sales (Profit and Loss).
How to assign a service period (recognition period) for a one-time invoice?
Follow the instructions below to set up recognition for one-time invoices in the most suitable way.
Create keyword mapping to assign service periods
Set up a keyword mapping to assign service periods to invoices following the steps below:
1. Open your Synder account → ‘Revenue Recognition’ in the menu tab.
2. Go to ‘Configuration’ → ‘One-time invoices’.
3. Enable one-time invoices recognition.
4. Click ‘Add keyword’ and start adding keywords to assign appropriate service periods.
Note: The keyword search looks into 3 Stripe fields:
1) Description, e.g. Golden subscription (at $1,200.00 / year);
2) Then in the Line metadata;
3) Then in the Invoice metadata.
If the keywords are found, → assign a recognition period based on the keyword mapping starting with the invoice creation date (invoice start date + period).
If the keywords are not found in the invoice → you can select the default behavior for such invoices:
1. Pause them for manual approval.
2. Keep them as one-time.
If you keep them as one time invoices:
Synder will sync them over to your profit and loss (the deferred revenue will not be affected).
If you pause them for manual review:
Synder will keep them on hold unless they are manually verified. Such invoices will NOT be synced to the books unless manually approved. They will become available for syncing to the books only once they are classified as one-time or once the schedules are created for them.
Move already synced one-off invoices into revenue recognition module
If you accidentally marked the invoice as one-time but later realize it needs to be recognized, you can manually assign a service period and send it to the revenue recognition module. Follow the steps below to do so:
1. Go to ‘Revenue Recognition’ → ‘One-time invoices’ → ‘One-time’ tab. This tab will show all the one-off invoices.
2. Find the needed invoice by search or with the help of filters.
3. First, roll back the invoice, since one-off invoices need to be recategorized in the books.
4. Once it is rolled back, the ‘Build schedule’ action will become available. Click ‘Build schedule’ and assign the required service period.
5. Synder will then create a subscription record and a schedule for the invoice. When you sync the invoice again, the app will now sync it to Deferred Revenue.
Note: You might need to map the new items (if any) in ‘Configuration’ → ‘Products’/‘Discounts mapping’.
Tips and tricks
1. All the subscriptions created from one-time invoices will be labeled as “internal” in the ‘Source’ column.
2. If your invoice contains multiple lines and different keywords are found in different lines → the first keyword found will be used to assign the recognition period for the whole invoice (including all invoice lines).
Reach out to the Synder Team via online support chat, phone, or email with any questions you have – we’re always happy to help you!