Daily Revenue Recognition Booked as Cash Sales

For ecommerce and SaaS companies, recognizing revenue accurately and in a timely manner is critical for financial reporting and operational cash flow management. Blue Onion provides a seamless integration with NetSuite to automate this revenue recognition process.

Blue Onion Revenue Recognition Journal Entries

Blue Onion's Revenue Recognition journal entries track and calculate the amounts that need to be transferred from the deferred revenue account to the income statement as recognized revenue. This includes:

• Deferred revenue from new sales
• Shipping charges, and
• Discounts
• Amounts to be recognized based on order fulfillment (ecommerce) or passage of time for valid subscriptions (SaaS)

This data is broken down in detailed reporting, with the ability to view aggregated amounts or drill down to the transaction level across:

• Multiple Shopify or Amazon stores
• Sales channels/order sources (e.g. Shopify, Amazon stores)
• Locations
• Individual products/SKUs

Automated Revenue Recognition in NetSuite

To streamline operations, Blue Onion pushes these pre-calculated revenue recognition journal entries into NetSuite automatically as summarized Cash Sale transactions, on a daily basis. This allows for:

1. Clearing the daily fulfillments or subscription values out of the deferred revenue liability account.
2. Recognizing the revenue on the income statement.
3. Calculating cost of goods sold (COGS) and make inventory adjustments at the product/SKU level.

The Cash Sale transactions contain:

• A line item for each SKU/product sold, with quantity and amounts calculated from actual sales
• The net amount for each line, matching the amount the customer paid for all sales of certain SKU by day
• Specific location details to handle multi-location/multi-subsidiary businesses and costing

This level of detail flows through to the general ledger, recording not just the top-line revenue number, but also COGS, inventory adjustments, and utilizing the appropriate subsidiary/location segments within the GL impact in NetSuite.

Benefits

By automating revenue recognition entries, Blue Onion helps companies:

1. Reduce manual effort and risk of errors in recording revenue
2. Accurately record COGS and inventory adjustments by location and SKU
3. Match revenue recognition timing to business requirements
4. Reduce clutter in NetSuite by summarizing daily transactions
5. Easily drill down into transaction details through the Blue Onion platform

This seamless integration between Blue Onion and NetSuite provides a robust and scalable process for recognizing revenue while ensuring accurate reporting across all business segments.