System and method for recognizing revenue and managing revenue lifecycles

• US 10,152,755 B2
• Filed: 01/21/2016
• Issued: 12/11/2018
• Est. Priority Date: 01/21/2015
• Status: Active Grant

• Current Assignee: Zuora Incorporated
• Original Assignee: Zuora Incorporated
• Inventors: Balsundaram, Jagan, Chilukuri, Seshagiri, Pearson, Katherine, Ramamoorthy, Karthikeyan
• Primary Examiner(s): Masud, Rokib
• Application Number:
  US15/003,593
• Publication Number:
  US 20160239927A1
• Time in Patent Office: 1,055 Days
• Field of Search: 705 16, 705 33, 705 35
• CPC Class Codes: G06Q 30/018 Certifying business or products
• CPC Class Codes: G06Q 40/128 Check-book balancing, updating or printing arrangements

Abstract

A system and method for calculating variable consideration for performance obligations. The method can involve, checking a database for historical transaction data, accessing the historical transaction data, and applying one or more predetermined variable consideration rules to the historical transaction data. The method can include automatically analyzing the historical transaction data generating an analysis report based on the data. The method can include uploading predetermined corrections to variable consideration transactions to a database or other storage medium and applying the corrections to historical performance obligation transaction data. The method can include determining whether variable consideration changes should be applied to individual transaction lines within the variable consideration transactions.

Claims

1. A computer-implemented method of calculating likely revenue based on variable consideration for one or more performance obligations of a performance contract, the method comprising:

receiving, at a server system from a client device over a communication network, information regarding a performance contract, the performance contract including one or more individual transactions and including one or more performance obligations that correspond with one or more revenue recognition events, each of the one or more performance obligations including at least one of the one or more individual transactions;

identifying, by the server system, the one or more individual transactions in the performance contract;

identifying, by the server system, the one or more performance obligations that correspond with the one or more revenue recognition events;

associating, by the server system, each performance obligation of the one or more performance obligations with a performance obligation stratification;

selecting, by the server system, a particular performance obligation of the one or more performance obligations;

identifying, by the server system, a particular performance obligation stratification associated with the particular performance obligation;

retrieving, by the server system from a database over the communication network, particular historical transaction data associated with the particular performance obligation stratification associated with the particular performance obligation;

identifying, by the server system, one or more particular revenue recognition events associated with the particular performance obligation;

projecting, by the server system, particular revenue from each of the one or more particular revenue recognition events;

identifying, by the server system, one or more variable-consideration types associated with the particular performance obligation stratification and with the one or more particular revenue recognition events, each variable-consideration type of the one or more variable-consideration types configured to identify a type of adjustment to the projected particular revenue;

using, by the server system, the particular historical transaction data to generate a variable-consideration modifier for each of the one or more variable-consideration types;

applying, by the server system, the variable-consideration modifiers to projected revenue associated with the one or more particular revenue recognition events to generate a likely revenue from the particular performance obligation; and

generating, by the server system, an analysis report based on the likely revenue from the particular performance obligation.

2. The computer-implemented method of claim 1, wherein at least one variable-consideration modifier is based on a percentage.

3. The computer-implemented method of claim 1, wherein at least one variable-consideration modifier is based on an amount.

4. The computer-implemented method of claim 1, further comprising:

determining actual revenue from the particular performance obligation;

generating one or more corrections to the likely revenue based on the actual revenue; and

applying the one or more corrections.

5. The computer-implemented method of claim 4, further comprising:

applying the one or more corrections to individual transaction lines.

6. The computer-implemented method of claim 1, further comprising:

determining one or more transaction costs associated with one or more individual transactions of the particular performance obligation;

assigning a fair value to the one or more individual transactions of the particular performance obligation; and

recognizing transactional revenue associated with the one or more individual transactions of the particular performance obligation.

7. A system for calculating variable consideration for performance obligations, the system comprising:

at least one processor in signal communication with a database;

memory in signal communication with the at least one processor, the memory storing computer-executable instructions, which, upon execution by the at least one processor, cause the at least one processor to;

receive, by the system from a client device over a communication network, information regarding a performance contract, the performance contract including one or more individual transactions and including one or more performance obligations that correspond with one or more revenue recognition events, each of the one or more performance obligations including at least one of the one or more individual transactions;

identify, by the system, the one or more individual transactions in the performance contract;

identify, by the system, the one or more performance obligations that correspond with the one or more revenue recognition events;

associate, by the system, each performance obligation of the one or more performance obligations with a performance obligation stratification;

select, by the system, a particular performance obligation of the one or more performance obligations;

identify, by the system, a particular performance obligation stratification associated with the particular performance obligation;

retrieve, by the system from the database over the communication network, particular historical transaction data associated with the particular performance obligation stratification associated with the particular performance obligation;

identify, by the system, one or more particular revenue recognition events associated with the particular performance obligation;

project, by the system, particular revenue from each of the one or more particular revenue recognition events;

identify, by the system, one or more variable-consideration types associated with the particular performance obligation stratification and with the one or more particular revenue recognition events, each variable-consideration type of the one or more variable-consideration types configured to identify a type of adjustment to the projected particular revenue;

use, by the system, the particular historical transaction data to generate a variable-consideration modifier for each of the one or more variable-consideration types;

apply, by the system, the variable-consideration modifiers to projected revenue associated with the one or more particular revenue recognition events to generate a likely revenue from the particular performance obligation; and

generate, by the system, an analysis report based on the likely revenue from the particular performance obligation.

8. The system of claim 7, wherein at least one variable-consideration modifier is based on a percentage.

9. The system claim 7, wherein at least one variable-consideration modifier is based on an amount.

10. The system of claim 7, wherein the computer-executable instructions further cause the at least one processor to:

determine actual revenue from the particular performance obligation;

generate one or more corrections to the likely revenue based on the actual revenue; and

apply the one or more corrections.

11. The system of claim 10, wherein the computer-executable instructions further cause the at least one processor to:

apply the one or more corrections to individual transaction lines.

12. The system of claim 7, wherein the computer-executable instructions further cause the at least one processor to:

determine one or more transaction costs associated with one or more individual transactions of the particular performance obligation;

assign a fair value to the one or more individual transactions of the particular performance obligation; and

recognize transactional revenue associated with the one or more individual transactions of the particular performance obligation.