> ## Documentation Index
> Fetch the complete documentation index at: https://docs2.zenskar.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Create a revenue recognition rule

## Overview

This guide explains how to create a new revenue recognition rule using the **Create Revenue Rule** interface. You will define the rule’s details, choose how revenue is distributed, and specify the conditions under which the rule applies.

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Navigate to **Accounting** > locate **Revenue Recognition** section at the bottom > click **Revenue Rule Library**.

## Step 1: Define rule information

In the **Rule information** section, enter the basic details for your rule.

* **Name** – Enter a unique and descriptive name for your rule.
  Example: *Monthly SaaS Subscription Rule*.
* **Description** – Provide a brief explanation of what the rule does and its purpose.
* **Revenue account** – Select the revenue account where recognized revenue will be posted.

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## Step 2: Configure revenue distribution

This section determines **how and when** revenue will be recognized.

### 2.1 Select the satisfaction type

* **Point in time** – Recognize the entire revenue amount at a single moment.
  If selected, the **Trigger point** field appears. For example, choose **Invoice approval** to recognize revenue when the invoice is approved.
* **Over time** – Recognize revenue over a period.
  When selected, the **Revenue distribution method** dropdown appears.

### 2.2 Choose the revenue distribution method

* **Equally by days**: Allocate revenue proportionally based on the number of days in each accounting period.
* **Equally by month**: Allocate the same revenue amount to each month, regardless of the number of days.
* **Usage based**: Recognize revenue based on the actual usage of a product or service in that period.
* **Entitlement based**: Allocate revenue based on specific entitlement events, such as feature activation or milestone delivery.
* **Equally by months with estimated transaction price**: Allocate equally by month using an estimated total transaction price, with later adjustments.

<Cards columns={0}>
  <Card title="Revenue distribution methods" href="https://docs.zenskar.com/docs/revenue-distribution-methods" icon="fa-info-circle" target="\_blank">
    See the **Revenue distribution methods** reference for details.
  </Card>
</Cards>

### 2.3 Adjust closed revenue difference

For over-time methods, select how to handle differences between initially recognized and final closed revenue:

* **Front load**: Apply the difference entirely to the earliest open period.
* **Straight line**: Spread the difference evenly across remaining open periods.
* **Back load**: Apply the difference entirely to the last open period.

<Cards columns={0}>
  <Card title="Adjust closed revenue difference" href="https://docs.zenskar.com/docs/revenue-adjustment-methods" icon="fa-info-circle" target="_blank">
    See the **Adjust closed revenue difference** reference for details.
  </Card>
</Cards>

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## Step 3: Set criteria for rule application

In the **Criteria** section, define which products or performance obligations the rule applies to.

1. **Column** – Choose an attribute to match against. Examples: *Product*, *Pricing model*, *Contract item name*, *Product start date*, *Business entity*.
2. **Condition** – Currently supports **equals**, meaning the column’s value must match exactly.
3. **Value** – Enter the matching value.

Click **+ Add filter** to add more conditions. Multiple conditions use **AND** logic — the product must meet all conditions to match the rule.

To link multiple products to a single performance obligation, select **Add more products to the POB**.

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## Step 4: Save your rule

When all fields are complete:

1. Review the rule configuration.
2. Click **Save** (top-right corner) to create the revenue recognition rule.
3. The rule will now be available for allocation in revenue recognition processing.