How to Manage Revenue Recognition in Salesforce | With Examples
Understand how to approach revenue recognition in Salesforce - and get it right.
Last updated December 31, 2025
Tracking revenue recognition in Salesforce is a powerful capability that delivers many benefits, especially for opportunities where revenue accrues over time. However, many companies struggle to achieve these benefits because they are unsure how to approach revenue recognition in Salesforce.
This comprehensive guide covers the benefits, best practices, common mistakes, case studies, and step-by-step instructions for managing revenue recognition and billing schedules in Salesforce.
How To Track Revenue Recognition in Salesforce
Revenue Recognition and Billing Schedules
Revenue recognition reflects how you earn the opportunity income over time, which gets included in bottom-line profit calculations. Billing cycles, by contrast, refer to the period during which you send invoices to the customer.
For example, for a 12-month service contract, revenue recognition occurs monthly, while the billing could be monthly, quarterly, or upfront.
Understanding this distinction is critical for accurate reporting and planning.
Common Mistakes Companies Make With Revenue Recognition
Even with good tools, errors can still occur. Key mistakes include:
- Forecast overstatement due to straight-line assumptions - assuming revenue accrues evenly can lead to inflated predictions.
- Manual schedule errors when close dates shift - spreadsheets and manual updates often create inaccuracies.
- Scheduling outside of Salesforce - relying on spreadsheets based on outdated opportunity exports introduces errors.
- Focusing on revenue instead of quantity - scheduling revenue directly instead of quantity can lead to misalignment; let revenue calculate from quantity where appropriate.
- Not comparing scheduled vs actual revenue - in industries like manufacturing or workforce services, discounts may be based on expected volumes that never materialize.
- Revenue recognized too early or too late - failing to align recognition with contract terms can distort reports and compliance.
Addressing these mistakes early ensures more reliable revenue forecasts and improved decision-making.
Five Reasons to Track Revenue Recognition in Salesforce
The benefits of tracking revenue recognition in Salesforce are:
- Reporting Power - Salesforce offers flexible, visual, and customizable reporting.
- Accessibility and timeliness - sales teams log into Salesforce daily, unlike accounting systems, which are typically restricted.
- Link to won opportunities - directly tie revenue recognition to opportunity products.
- Actionable insights - pipeline revenue recognition helps identify priorities.
- Target tracking - compare actuals vs targets using reports or the Product Schedules by GSP app.
Revenue Recognition Using Product Schedules in Salesforce
Product schedules enable you to spread revenue from opportunity products over a specified period. Each product can have a separate revenue recognition profile, which is critical for multi-product deals.
Example: A SaaS contract for 12 months, plus professional setup services, will require two separate schedules—one spanning 12 months and another for the short-term service duration.
Pro tip: For advanced MRR or ARR metrics, consider Subscription Manager by GSP.
How to Create Product Schedules in Salesforce
You can enable users to create product schedules through three main options:
- Product Schedules by GSP - top recommendation for simplicity, automation, and control.
- Standard product schedules - included with Salesforce, but cumbersome and manual.
- Salesforce Billing and CPQ - robust for large, complex operations but resource-intensive.
Product Schedules by GSP. We built the GSP Product Schedules app to address the shortcomings of the standard functionality and provide a significantly lower-cost, straightforward alternative to Salesforce Billing and CPQ. The app enables salespeople to easily add and adjust product schedules, utilizing reports and dashboards to provide visibility into revenue recognition forecasts and projections. We charge for the app on a per-user basis, rather than per company, with monthly and annual payment options available.
Standard product schedules. The standard product schedules functionality hasn't changed much since I began deploying Salesforce in 2003, and it's challenging and cumbersome. For example, when the opportunity close date shifts, salespeople must drill into each product and manually adjust the schedules. They often don't do this, so your revenue recognition report quickly becomes inaccurate. On the other hand, it's a standard feature included with your Salesforce license fee.
Salesforce Billing and CPQ. The Salesforce Billing option is a credible solution for those with large and complex operations that require sophisticated product management and revenue recognition capabilities. Significant resources (human and financial) are necessary for successful implementation, along with robust project management and the discipline and willingness to re-engineer your processes. Many companies have successfully implemented Salesforce Billing and CPQ, but it's not a journey you should embark on lightly.
Next, let's examine a straightforward revenue recognition example using a straight-line method. Then, I'll show you how to manage more complex revenue recognition scenarios.
Tracking Straight-line Revenue Recognition in Salesforce
Product Schedules by GSP allows salespeople to enter schedule parameters per product, producing accurate earned revenue reports across multiple opportunities. Reports and dashboards provide insights into year-to-date earned revenue, monthly breakdowns, and pipeline projections.
Salespeople enter the schedule parameters when adding a product to the opportunity.
As shown in this example, there are twelve schedules for $1,000 over 12 months.
Scaling this up using reports and dashboards that span multiple opportunities delivers visibility of our overall revenue recognition.
For example, here's the top row of the dashboard that comes built-in with the app.
Our revenue recognition for the year-to-date is $$701K, and you can view the monthly breakdown. The Year-to-Date earned revenue is $232K. Other charts show this information by product category, territory, and salesperson.
However, let's look at pipeline revenue recognition.
The dashboard chart indicates $229,000 in potential earned revenue this year. The underlying report shows this information by the product group and salesperson.
Of course, we can see the same information for each quarter or year. For example, here's the revenue recognition chart for next year.
The chart shows revenue expected from land next year, based on opportunities already won. In other words, the revenue recognition on some deals spans this year and next.
Tracking Complex Revenue Recognition in Salesforce
For non-straight-line revenue, Product Schedules supports multiple profiles:
- Free trials
- Chargeable proof-of-concept
- Reduced or no-charge periods
- S-curve profiles
- Seasonal variations
- Consumption-based revenue
- Pro-Rated (by Month)
- Pro-Rated (by Day)
These methods allow for more accurate alignment of revenue recognition with customer-specific timelines.
Free Trial
A free trial typically precedes the sale. In other words, you can't regard the deal as closed unless the customer has committed to signing the contract or paying for the service.
Therefore, for a free trial, you set the Close Date and the Product Schedule's Start Date to indicate when the trial ends.
Of course, trials are sometimes extended. With Product Schedules by GSP, when you change the Close Date of a pipeline opportunity, the schedules automatically shift to the same number of days. This process ensures the revenue recognition report remains aligned with the date the customer signs the contract.
Chargeable proof of concept
This method differs from a free trial because the customer pays a fee for the proof of concept. The best approach is to utilize two different opportunities.
The first opportunity represents the sales process up to securing a proof of concept. The product schedules on this opportunity reflect the relatively short-term nature of the proof-of-concept.
You have a second opportunity that reflects the main deal. The product schedules for this opportunity reflect the revenue recognition profile associated with winning the main agreement.
The primary opportunity stays open when you win the proof-of-concept deal. That's because the customer hasn't committed to the longer-term arrangement yet; it depends on the outcome of the proof of concept.
As a result, you have a combination of won schedules (i.e., revenue you can recognize) and pipeline schedules (potential revenue you cannot yet recognize) on the same account, albeit on two different opportunities. Winning the primary deal means recognizing the revenue on the second opportunity.
No charge period
This scenario differs from a free trial or proof of concept. It occurs when you are in a competitive situation and trying to persuade the customer to switch from an incumbent provider.
The customer is willing to move to your service before their contract with the existing provider ends. However, they don't want to pay for both services simultaneously. That means you agree to a reduced or no-charge period until the customer's contract expires.
Doing this aligns the revenue recognition report with the period during which the customer pays for the service. Additionally, it allows the no-charge period to be accurately reflected in the report.
S-curve revenue recognition
Companies that need to recognize revenue over an extended period often use an S-curve approach.
For example, major projects in the construction industry can take several years to complete. The monthly income is relatively small during the early phases because the work centres on on-site preparation and planning. At the end of the project, the revenue is relatively low again because it's mostly finishing off work that was already underway.
In other words, significant revenue is earned in the middle period.
Using Product Schedules by GSP enables users to select various revenue recognition profiles, including the S-curve. This option automatically generates a revenue recognition profile based on the projected income from a long-term project.
Seasonal variations
Using Product Schedules by GSP enables users to select various revenue recognition profiles, including the S-curve. This option automatically generates a revenue recognition profile based on the projected income from a long-term project.
Several customers utilize this profile in the education sector, where revenue recognition from annual contracts is significantly higher during the spring and fall periods.
Like the S-curve, the product schedules automatically align with the revenue recognition profile, producing accurate earned income reports.
Consumption-based
Sometimes, the revenue recognition profile is unique to each customer. For example, delivering professional services on a project reflects the specific milestones and work patterns agreed upon by each customer.
The app enables salespeople to easily customize their revenue profiles.
As a result, the revenue recognition profile reflects the level of work and effort agreed with each customer.
Remember, you can visit the app page for Product Schedules by GSP to learn more or refer to the Product Schedules AppExchange Listing for a free trial or test drive.
Case Studies: Vision Media and JAE
Before implementing GSP Product Schedules, Vision Media and JAE relied on spreadsheets, leading to errors and delays. After implementation:
- Schedules automatically adjust with changes to the close date.
- Forecasts became accurate and timely.
- Revenue recognition is aligned across opportunities and products.
Read the full details in the Vision Media and JAE Customer Stories.
How to Manage Billing Schedules in Salesforce
Billing schedules determine when invoices are sent. These can be set at the opportunity or product level. Use Salesforce flows to automate schedule creation and ensure synchronization with opportunity close dates. Define billing frequency via opportunity-level fields when uniform across products.
A straightforward way to do this is by using a field on the opportunity to define the billing frequency.
There's no standard billing schedule in Salesforce, so you'll need a custom object.
When users populate this picklist, a flow automatically generates the billing schedules. Remember to inform the flow of the start date to use for the billing schedules (such as the opportunity close date) and to adjust the schedules accordingly if the start date changes.
The result is a sequence of billing schedules linked to the opportunity and relevant products.
Get in touch if you need help creating the flow.
What To Do Next
- Review Product Schedules by GSP. Visit the Product Schedules app page or AppExchange Listing.
- Contact us for a walkthrough.
- Explore related blog posts such as How To Manage Framework Agreements in Salesforce.
Revenue Recognition in Salesforce: FAQs
Yes, Product Schedules supports multiple methods for different products within the same opportunity.
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