5-step revenue recognition process for subscription businesses

Milestones: A software project identifies the completion of a particular number of modules as its milestone criteria.
Costs incurred: If the total costs are $20,000, a company could assume the project is 25% completed when the incurred expenses reach $5,000.

It's tempting to update your revenue immediately when cash lands in your account. But since cash is not revenue, treating the two similarly is a mistake and could prove fatal for your business moving forward.