When to use this
Use Usage Based Revenue when revenue depends on milestones, units consumed, or percentage completion rather than calendar time. Set up a usage based account once, then each month enter the usage manually or connect a spreadsheet that syncs automatically. ScaleXP recognizes each invoice in that account from the usage you supply, rather than from its line item dates.
For a simpler "spread everything in this account the same way" pattern, use How to set rule based revenue allocations. For a line that mixes a fixed and a time-based element, see How to set up a complex, multi-tiered revenue allocation rule.
Step 1: Open the usage based recognition rules
- Go to the Customers tab.
- Click the three dots at the top right, then Usage Based Recognition.
The Configure Usage Based Recognition Rules window opens.
Once usage based revenue is set up, you can also open this window from the Journals tab: on Month-End Close, click Open on Usage Revenue under Revenue, then click the cog at the top right of the page.
Step 2: Choose your usage data source
Under I will input my data from, choose how you will enter usage each month:
- Manual entry: enter amounts or percentages on the Usage Revenue page. See Usage Based Revenue: Update.
- Google Sheet: connect a template sheet that syncs daily. See Usage Based Revenue: Connect Google Sheets.
- Microsoft Excel: connect an Excel Online template through Microsoft 365. See Usage Based Revenue: Connect Microsoft Excel.
All usage based accounts use the same source. You can't mix manual entry with a spreadsheet across accounts.
Changing the source later deletes all usage data entered to date, and ScaleXP goes back to standard revenue recognition for those invoices in every month, not just from now on. ScaleXP asks you to confirm first. If you have already posted journals using this usage data, your next revenue journal will include changes to earlier months, so check with support@scalexp.com before changing the source.
Step 3: Choose the currency
Under Show amounts in, choose the currency you enter and view usage in:
- Home currency (for example USD): matches the rest of ScaleXP. Amounts are converted at the exchange rate recorded on each invoice in your accounting system, not today's rate.
- Invoice currency: each invoice's own currency.
If you use a connected spreadsheet, changing the currency also converts the amounts already in the sheet, using each invoice's own exchange rate.
Step 4: Select the GL account
Select the revenue account you want to flag as usage based. Every invoice posted to that account is recognized from the usage you supply, rather than ScaleXP's text recognition.
Step 5: Add or remove usage based accounts
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Add: click Add Usage Based Account and select the next account.
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Remove: click the bin icon next to the account, then Delete to confirm. This deletes all usage data for the account, and ScaleXP goes back to standard revenue recognition for its invoices in every month, not just from now on. If you have already posted journals using this usage data, your next revenue journal will include changes to earlier months, so check with support@scalexp.com before removing it.
Step 6: Enter your usage
If you chose a spreadsheet, follow Connect Google Sheets or Connect Microsoft Excel to create and connect your template. For manual entry and the monthly flow, see Usage Based Revenue: Update.
Example: fixed-fee project with milestone billing
A $40,000 fixed-fee project is invoiced upfront to a Project Revenue account flagged as usage based. Revenue should be recognized as milestones close: 30% at design sign-off, 40% at build completion, and 30% at go-live.
- Month 1: enter 30% (design sign-off). ScaleXP recognizes $12,000, and the line stays open with $28,000 remaining.
- Month 3: enter 40% (build complete). ScaleXP recognizes another $16,000, and the line stays open with $12,000 remaining.
- Month 5: enter 30% (go-live). ScaleXP recognizes the remaining $12,000, and the line shows Done.
Although the whole $40,000 was invoiced upfront, ScaleXP recognizes it in months 1, 3 and 5, as each milestone is reached.