Why is my Monthly Recurring Revenue different than my Recognized Revenue?

Revenue recognition is only available as a paid Add-on to all plans except for the free Launch plan. Please contact us to learn more. 

Recognized revenue allows you to see the revenue from contracts that have been fulfilled. In subscription metrics, recognized revenue for a particular month can be much lower than said month's predicted MRR if the service period started late in the month.

This will depend on your revenue recognition strategy settings which by default are set to spread revenue evenly throughout the service period.

It is possible to change your revenue recognition strategy within your Chartmogul settings by going to Admin > Data settings > Revenue Recognition. You can read more about the different strategies here.

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Example:

Customer A started a monthly subscription on November 29th, at 12 pm, and paid $14.99. They have an MRR of $14.99 on November 29th as we can assume that they will continue to pay that while the subscription is active.

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However, their recognized revenue for November is only $0.75. This figure represents how much of the subscription has been fulfilled in November.

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The basic calculation is:

(subscription value / days in the month) x days of service

(14.99 / 30) x 1.5 = 0.75

We calculate the time down to the second to be accurate, so the exact time of day when a customer signs up is taken into consideration.

The rest of the payment will contribute to recognized revenue in December when the service period has been completely fulfilled.

This means that if Customer A's subscription were to have started on December 1st at midnight, the entire $14.99 would be recognized in December rather than split across two months.