Synder provides GAAP-compliant revenue recognition for SAAS businesses managing their subscriptions in Stripe.
However, some businesses prefer to recognize only long-term subscriptions (3-month/6-month/yearly/etc.), but not monthly ones. This guide will explain what modes are available in Synder to deal with monthly subscriptions.
Synder provides 2 options:
- Recognizing monthly subscriptions
- Excluding monthly subscriptions from recognition
Recognizing monthly subscriptions
Synder will synchronize monthly subscriptions to Deferred Revenue as soon as the invoice is issued. At the end of each month, a part of the monthly subscription is recognized as revenue at the end of each month according to the selected calculation method.
This will also concern any smaller period subscriptions, like weekly or biweekly.
Revenue Recognition reports in Synder will include revenue for monthly invoices.
Excluding monthly subscriptions from recognition
With this mode, Synder will not recognize any monthly subscriptions or subscriptions with smaller billing periods (weekly/biweekly). Such invoices will be synced directly to P&L and will be reflected as revenue right away.
They will not affect Deferred Revenue and will not show up under Revenue Recognition reports in Synder.
Note: If a yearly subscription is downgraded to monthly (or vice versa, a monthly subscription is upgraded to a yearly one), Synder will only recognize the yearly part of the subscriptions, and the monthly invoice will hit the income account directly (without hitting the Deferred Revenue).
How to set it up
Once Revenue Recognition is enabled, it is one of the basic settings.
Note: Revenue Recognition settings are hard to change due to high dependency on historical data. If you want to change this setup, reach out to the support team for help.
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!