Pinnokio

Finance leadership · schools, lawyers, services

Available

When to recognise revenue?

A receipt is not always revenue: context decides.

The situation

A school collects tuition fees before delivering the service. A lawyer receives a down payment. In both cases the money is in the bank account, but the revenue is not necessarily earned.

A receipt is assigned to its period depending on whether the revenue is earned or not.
Receipt → revenue earned? → assigned to the period.

What Pinnokio does

  1. 1

    Understand the transaction

    Nature of the service, progress, conditions of the file.

  2. 2

    Distinguish the receipt from the revenue

    A down payment or an advance receipt may not be immediately earned revenue.

  3. 3

    Recognise as the service is delivered

    Revenue is recognised according to the file's rules and the planned milestones.

  4. 4

    Submit for approval

    Sensitive cases go back to the authorised person.

The result

Accounting treatment consistent with the reality of the service and the period: revenue is recognised as the service is delivered, and sensitive cases remain subject to your approval. The connector module and the contracts module carry this recognition.

Limits and approvals

  • Recognition rules depend on context, sector and country: they are defined with you.
  • Pinnokio prepares and proposes; the decision stays subject to approval.

Frequently asked questions

Is a down payment revenue?

Not necessarily: a receipt does not always correspond to immediately earned revenue. The treatment depends on the context of the file.

Why does the period matter?

An advance receipt may relate to a service delivered later: assigning it to the right period avoids distorting results.

Related path

Finance leadership

See how it works on your own scenario

A business situation, your tools, your rules: the demo starts from your reality.

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