Revenue recognition determines when and at what amount sales proceeds are recorded as revenue. Under accrual accounting, earning the revenue matters rather than simply receiving cash.[1] An order event, invoice date and payment date therefore need not indicate the same revenue-recognition point.
Advance payment for an unfulfilled order is not automatically earned revenue immediately. Define which event drives recognition and how cancellations and returns are handled. Do not mix reports using different bases when comparing periods, channels or growth; a payment view and a revenue view answer different questions.
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Compiled with AI assistance using public sources. General explanation, not individual legal or tax advice. Describing a concept does not mean Zoloo offers it as a feature.