Billing, cash, and revenue are three different timelines
The invoice date decides when a customer owes you money. The payment date decides when you have the cash. Neither decides when you have revenue. Under ASC 606 and IFRS 15, revenue is recognized when (or as) you deliver what the contract promised, so a single contract produces three schedules that rarely line up.
The gap between billing and delivery is what the schedule above tracks. Bill ahead of delivery and the difference sits as deferred revenue: the journal entry at invoice is debit accounts receivable, credit deferred revenue, and each month you move the earned slice from deferred revenue to revenue. Deliver ahead of billing and the difference is unbilled revenue, a contract asset that turns into a receivable when you invoice.
Most teams rebuild this in a spreadsheet at every close, and it drifts every time a contract is upgraded, extended, or re-scoped. If the schedule here does not match what your ledger shows for the same contract, that difference is worth finding before the auditors do.
Frequently asked questions
What is a revenue recognition schedule?
It is a month-by-month table of how much of a contract becomes revenue in each period. Under ASC 606 and IFRS 15, revenue follows delivery of the promised service, not the invoice date or the payment date, so a 12-month subscription invoiced upfront is recognized one twelfth at a time.
What is the difference between billed revenue and recognized revenue?
Billed is what you have invoiced. Recognized is what you have earned by delivering. When billing runs ahead of delivery, the gap is deferred revenue, a liability on the balance sheet. When delivery runs ahead of billing, the gap is unbilled revenue (a contract asset).
How is deferred revenue calculated?
Deferred revenue at the end of a month is everything billed to date minus everything recognized to date, when that number is positive. For a $12,000 annual contract billed upfront and recognized evenly, deferred revenue is $11,000 after month one, $10,000 after month two, and zero at the end of the year.
How are months that start or end mid-month handled?
Every full month gets the same amount: the contract value divided by the term in months. A partial first or last month is prorated by the days of that month it covers, so a contract starting on September 15 recognizes 16/30 of a full month in September. Some teams instead spread the value evenly over every day of the term, which makes 31-day months slightly larger than 30-day months; both are acceptable if applied consistently.
How is revenue recognized on a prepaid usage commitment?
As the customer consumes the committed units. Usage above the commitment is billed and recognized as overage in the month it happens. If the commitment expires with units unused and you do not expect the customer to use them, the unused amount (breakage) is recognized at expiry. If you can reliably estimate breakage earlier, ASC 606 lets you recognize it in proportion to usage instead; this calculator uses the simpler at-expiry approach.
Is this a substitute for an accountant or revenue software?
No. It models single-obligation contracts with a clear pattern of delivery. Contracts with several performance obligations, variable consideration, material rights, or significant financing components need standalone selling price allocation and judgment. Use the output to sanity-check your schedule and to explain it, not as audited numbers.