Stripe launches Revenue Recognition to simplify accounting and automate financial reporting
- Fast-growing businesses in more than 40 countries can now use Revenue Recognition to eliminate tedious data aggregation.
- With a few clicks, businesses can produce accurate and auditable financial presentations.
- Revenue Recognition is the latest in Stripe’s integrated suite of products that help businesses optimize growth and efficiently maximize revenue.
SAN FRANCISCO—Stripe, a global technology company that builds economic infrastructure for the internet, today launched Revenue Recognition to millions of users in 40 countries* around the world.
Recognizing revenue is the process of mapping the money businesses make to the correct date (or dates) on an income statement—for example, when a customer receives a product or uses a service, rather than when the customer made a payment. Too often, it is a manual, inefficient, and error-prone process for finance teams.
Stripe Revenue Recognition streamlines this process by facilitating three key tasks: consolidating transactions in one place, categorizing transactions appropriately, and automatically generating advanced, auditable reports. As a result, users can now access a comprehensive view of their financial health, saving significant time and money along the way.
Ryan Macpherson, Founder and CEO of Coassemble said, “Recognizing revenue is all about speed and accuracy. Stripe excels at both. We’d literally need to hire two or three bookkeepers if we weren’t using Stripe.”
The complexities of accurately recognizing revenue
For a company’s leaders and investors, revenue recognition—a key part of GAAP (Generally Accepted Accounting Principles) standards—provides an accurate representation of profits and the ability to comprehend a company’s financials in a standardized fashion.
Maintaining accurate books under this standard can be especially complex for SaaS, subscription, and e-commerce companies, which are typically paid up front for goods and services that will be delivered in the future or over an extended period of time.
For example, an e-commerce provider would recognize revenue not when a customer clicks “purchase” or when a product is shipped, but when a product is actually received by the customer. For a SaaS company, if a customer pays $120 for an annual subscription on January 1, that revenue would be recognized not on a single date, but as $10/month for the subsequent 12 months.
How Stripe Revenue Recognition works
Revenue Recognition provides businesses running on Stripe with:
- Insightful reporting tools: whether they’re a CFO or first-time founder, users can zero in on their company’s performance with reports like balance sheets, income statements, revenue waterfall tables, and more.
- Automatic updates: all transactions and payments changes occurring in Stripe are automatically accounted for in reports. Users can also import non-Stripe transactions.
- Expanded controls: users can adjust reports to accurately account for deferred revenue, exclude certain types of revenue, pass through fees, and many more accounting configurations that align with their business.
- Frictionless integration: Revenue Recognition requires zero IT implementation to get started, and is fully integrated with Stripe’s payments platform, including Stripe Billing and Stripe Invoicing.
- Compliance support: businesses can achieve compliance with global standards like ASC 606 and IFRS 15 with audit-ready statements.
Optimized for fast-growing SaaS businesses
Stripe Revenue Recognition was built especially for fast-growing businesses with subscription-based or recurring revenue models.
“This is a really big deal for companies,” said Vladi Shunturov, Product Lead at Stripe. “No one wants to slow down for tasks that could be automated, especially leaders at high-growth businesses. In my prior company, which I cofounded, we spent ten cents on every dollar dealing with the operational friction of manual revenue management. That’s unacceptable. I’m a founder-in-exile at Stripe now, and I couldn’t be more excited to help founders, CFOs and finance teams automate their finance operations so they can spend their time and money where it really matters.”
Thousands of early SaaS customers have been using Revenue Recognition to simplify accounting and automate revenue reporting as they scale new heights.
“Having all of our revenue reporting needs in one system is long overdue,” explains Nic Malianni, Head of Accounting at Notion. “We are excited to see all that Revenue Recognition can offer. Our accounting teams are constantly challenged with fragmented systems and reporting requirements, this latest tool from Stripe will shift our focus from reconciling systems and creating custom reports to building the business.”
“We’re moving everything to Stripe, so all of this complex work will disappear,” said Arianna Cesareo, Lead Accountant at Productboard. “Before Stripe, closing our books meant checking each contract manually and pasting them into an Excel file with a very complicated formula. We can’t be done with that soon enough.”
As consumers drive the shift toward recurring billing, Revenue Recognition is the latest in a set of seamlessly integrated Stripe tools that maximize revenue and optimize growth as SaaS spending and the subscription economy grow in parallel in the coming years:
- Stripe Tax, which makes it easy to calculate and collect sales tax, VAT, and GST; earlier this year, Stripe also acquired TaxJar to help simplify tax compliance for businesses even further.
- Recent enhancements to Stripe Invoicing including multi-currency support, mobile invoicing, and PDF attachments—all of which help businesses get paid faster.
- Stripe Billing, which helps businesses more easily create and manage subscriptions with flexible billing logic.
*Stripe Revenue Recognition is now available in Austria, Australia, Belgium, Brazil, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hong Kong, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Lichtenstein, Luxembourg, Malta, Malaysia, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, US, UK, UAE.