The system reads dates automatically for both revenue deferral and prepayments.
The ScaleXP system will automatically recognise multi-month invoices and spread the revenue over the relevant period. This is fully automated based on the invoice line description.
HOW SCALEXP RECOGNIZES DATES
The system uses natural language processing and precise allocation of revenue per day to allocate revenue.
If the invoice line description does not include a specific date or time period, revenue will be shown in the current month.
The system can read several different date formats.
BEST PRACTICES
Enter a start date and end date in the line description. These formats work well:
- 23-May-2021
- 01-Nov-2020
- Mar-01-2020 (with the month first, in American format)
- 1.Jan.2021
When entering date ranges, ensure that the dates are separated by spaces, for example:
- 23-May-2021 to 23-May-2022 (entering the month as text is best practice to avoid any possible confusion)
- 23-05-2021 – 23-05-2022 (note the space between the dates; this is important to ensure the system can read it properly)
The system uses European date format as a default, so when invoices entered in the North America, it is important to ensure the month is clear.
- 01/03/2020 will be recognised as 1 March.
- March-1-2020 will also be recognised as 1 March
- The key take-away is to make the month clear, ideally using a word rather than a number.
The system also recognises common words to describe the invoice term. These include:
- Annual
- Quarter
- 8 months or 6 months or any number of months
If you are using these words, please be as clear as possible, keeping in mind that the default is to recognise revenue in the current month.
Each invoice line is read separately, so it is critical that the relevant time is included on each line, particularly if all items in an invoice are multi-month.
MULTIPLE LINE ITEMS
This configuration gives you the flexibility to issue one invoice covering many items and times. As an example, if an invoice is issued with these three lines:
- Hardware
- Annual software license fee, starting on 15-July-2021
- Hardware warranty, 9 months starting 1-Aug-2021
The system will allocate revenue:
- Hardware: All revenue will be recognised in the month the invoice is issued
- Software license: Revenue will allocated over 12 months, starting on 15 July
- Hardware warranty: Revenue will be shown in 9 equal amounts, starting 1 Aug
For now, ScaleXP only understands English. If invoices are issued in other languages, it is best to use numerical date format, ensuring the month can be understood by an English-speaking computer system.
EXAMPLES OF GOOD AND BAD FORMATS
Best practice tips to ensure the system reads dates correctly:
1) Use month name or abbreviation rather than a number
2) Use all four digits for the year
3) Include spaces between start and end dates (for example, not 03May2020-02May2021 which includes a hyphen without spaces either side of it)
4) Avoid having too many data points in invoice line item descriptions (Only have dates, or periods). Anything that can be read as a date, will be read as a date.
- Good Example: Product A Subscription 1/1/2024 to 31/12/2024
- This would defer the revenue over the defined calendar year
- Good Example: Product B Annual Subscription
- This would defer the revenue for 12 months from the invoice issue date
- Good Example: Professional Services
- This would show all revenue on the issue date
- Bad Example: Product A Annual Subscription prorated from 3/6/24
- This would be read as a 12 month subscription starting 3/6/24
- Bad Example: Product A Annual Sub at 2.5% interest from June 1 to May 31
- This could be very confusing with Annual, 2.5 (2nd May) and a date range.
- Bad Example: 3 year contract for product A
- This would defer the revenue over 3 years, even if only the 1st annual invoice
For more information on how the system allocates revenue across months and days, see this article.