We’re fluent in startup finance. Now you can be too.

Learn more about common financial (and startup) terms here. To learn more about Pilot, fill out the form below.

Oops! Something went wrong while submitting the form.
Glossary
  >  
Revenue Recognition

What Is Revenue Recognition?

Revenue recognition refers to when and how your business accounts for the money it collects.

Properly recognizing income can be more difficult for companies that use accrual accounting than cash-basis accounting, as many startups do. But it’s important for understanding the financial health of your business.

For businesses that collect money before or after providing a product or service, revenue may be categorized in different ways. For example, accrued revenue is money that you’re owed for products or services you’ve already delivered. Conversely, deferred revenue is money that you’ve collected for a product or service you haven’t delivered yet. 

To comply with generally accepted accounting principles (GAAP), you can only recognize the income as earned once you’ve received payment, and the product or service has been delivered.

Need help with other finance or startup questions?

Pilot provides bookkeeping, CFO, and tax services for literally thousands of startups and growing businesses. We've successfully processed over 10 million transactions for our customers and have unparalleled expertise when it comes to helping businesses succeed.

We're the largest startup-focused accounting firm in the United States, and we'd love to help you. To talk to an expert on our team and find out what Pilot can do for you, please click "Talk to an Expert" below, or email us at info@pilot.com.

See what Pilot can do for you

Get the peace of mind that comes from partnering with our experienced finance team.

Oops! Something went wrong while submitting the form.