Subscription and contract revenue is the line investors check first and the one most likely to be wrong. Cash arrives in one month and the revenue belongs across twelve; annual prepayments, mid-term upgrades and refunds each need handling. We set the policy, apply it every month, and document it.
An annual prepayment makes one month look extraordinary and the next eleven look flat.
The balance grows, nobody reconciles it, and it becomes a number no one can explain.
Two similar contracts get recorded two different ways and the pattern is impossible to audit.
What an engagement includes depends on scope. These are the parts that come up most.
How each contract type is recognised, agreed once, so the treatment does not depend on who did the close.
Reconciled every month to the balance sheet, with the movement explained.
Stripe or your billing system reconciled to the books, so the revenue line and the invoices agree.
It depends on who reads your numbers. A company with no outside investors and no audit ahead of it often needs a consistent, documented policy more than a formal one. If a raise or an audit is coming, the formal treatment is worth doing before somebody asks.
Usually yes. We work out the correct treatment, restate the affected periods, and document what changed and why, which is what a reviewer will ask for.
No. We keep the books to the policy and hand your CPA financials they can work from. Tax positions stay with them.
We will say plainly whether this is work we should be doing for you, and what it would cost.