Invoice value, cash collection, bookings and accounting revenue can all be different numbers.
Finance controller
Monthly, with deal review
Create a contract summary template.
Executed customer contracts.
The applicable accounting framework determines the recognition model. Finance should identify the customer contract, enforceable rights, promised services, transaction price and when control of each service transfers.
An annual subscription collected upfront is commonly recognised over the service period when the obligation is satisfied over time. Implementation, customisation, usage fees and variable consideration may require separate analysis.
Contract modifications, upgrades, cancellations, credits, free periods and reseller arrangements change timing. The accounting memo should explain the policy and connect billing data to the general ledger.
| Control | What it covers | Operating rule |
|---|---|---|
| Contract | Approved arrangement with enforceable terms. | Keep executed order and master agreement. |
| Performance obligation | Distinct promised service or bundle. | Assess setup and customisation. |
| Transaction price | Fixed and variable consideration. | Consider credits and refunds. |
| Recognition pattern | Point in time or over time. | Link to delivery evidence. |
Establish a pre-signature review for non-standard terms such as acceptance clauses, refund rights, service credits and bundled implementation. Accounting should not discover them after billing.
Report bookings, annual recurring revenue and cash separately from statutory revenue. Management metrics can be useful when definitions and reconciliations are transparent.
Document the decision, owner, due date and evidence expected. A verbal explanation should be converted into a board note, approved working, contract amendment, portal acknowledgement or reconciliation before the item is treated as closed.
Rules, forms, thresholds and interpretations can change. The operating team should use the latest official source and the actual company facts instead of copying a control from another entity or prior year.
Ask four questions: Is the obligation or accounting treatment applicable? Has the underlying transaction been completely recorded? Does the evidence agree with the books and portal? Has an independent reviewer challenged the exception?
The review should distinguish a timing difference from an error, a judgement from a missing document, and a control failure from a one-time operational delay. Repeated small exceptions deserve root-cause action because they often become material during audit, fundraising, notice or distress.
The operating record should connect the control stages—contract, performance obligation, transaction price, recognition pattern—to the same transaction population. If the source list, accounting ledger, tax return, board record and management dashboard use different populations, the review can appear complete while exceptions remain outside the test.
Management should define an exception threshold, but the threshold must not hide repeated failures. A small error occurring every month can signal weak master data, unclear ownership or a broken interface. The reviewer should record root cause, immediate correction and preventive action separately.
Closure requires evidence. At minimum, the file should show who prepared the work, who reviewed it, which source documents were used, what differences remained and when the next follow-up is due. Screenshots without context or spreadsheets without source references are not a durable control record.
Finance should reconcile the operational schedule to the general ledger and explain every reconciling item by amount, age and owner. Manual journals, overrides and post-close changes deserve heightened review because they can bypass the normal transaction flow.
The board view should separate reported results from estimates and management metrics. When a KPI does not follow the statutory accounting framework, provide a stable definition and a bridge to the closest financial statement line so the measure cannot be changed silently.