---
title: Ratable Revenue Recognition
description: Learn about the various ratable methods of revenue recognition supported by Chargebee RevRec.
tags:
  - RevRec
  - Revenue Recognition
  - Ratable Methods
  - SaaS
last_updated: 2026-04-11
---

## Overview

RevRec automatically generates revenue recognition schedules based on the service start and end dates. The ratable method of revenue recognition is commonly used for SaaS-based product offerings. Another common use case is post-contract customer support, where the contract period is generally a year from the initial contract.

RevRec defines a range of dates using the **Half-Open approach (start ≤ x < end)** where the service start date is inclusive and the service end date is exclusive.

You can contact [RevRec Support](mailto:revrec-support@chargebee.com) to choose your preferred ratable method from the following:

- 30/360 Ratable Plan  
- Modified 30/360 Ratable Plan  
- Classic Ratable Plan  
- Daily Ratable Plan  
- End Month Exclusive  

---

## 30/360 Ratable Plan

This method assumes:
- A **360-day year**
- **12 months of 30 days each**

Revenue per day is calculated as:

Revenue per day = Total Revenue / 360

### First Period
- Prorated based on remaining days in the first month  
- If ≥ 30 days → treated as a full month  

### Last Period
- Prorated based on remaining days in the last month  
- If ≥ 30 days → treated as a full month  

### Remaining Periods

Remaining Revenue = Total Revenue - (First + Last period revenue) Monthly Revenue = Remaining Revenue / Remaining months

### Example

Contract: $1,200 (03/21/20 → 03/21/21)

<Table>
  <TableHeader>
    <TableRow>
      <TableHead>Period</TableHead>
      <TableHead>Month</TableHead>
      <TableHead>Revenue</TableHead>
      <TableHead>Calculation</TableHead>
    </TableRow>
  </TableHeader>
  <TableBody>
    <TableRow>
      <TableCell>First Period</TableCell>
      <TableCell>March 2020</TableCell>
      <TableCell>$33.33</TableCell>
      <TableCell>
        First Period % = 10 / 360 = 2.78%
      </TableCell>
    </TableRow>
    <TableRow>
      <TableCell rowSpan={11}>Remaining Periods</TableCell>
      <TableCell>April 2020</TableCell>
      <TableCell>$100</TableCell>
      <TableCell rowSpan={11}>
        Remaining = 1200 - (33.33 + 66.66) = 1100  
        Duration = 11 months → $100/month
      </TableCell>
    </TableRow>
    <TableRow><TableCell>May 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>June 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>July 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>August 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>September 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>October 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>November 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>December 2020</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>January 2021</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow><TableCell>February 2021</TableCell><TableCell>$100</TableCell></TableRow>
    <TableRow>
      <TableCell>Last Period</TableCell>
      <TableCell>March 2021</TableCell>
      <TableCell>$66.66</TableCell>
      <TableCell>Last Period % = 20 / 360 = 5.56%</TableCell>
    </TableRow>
  </TableBody>
</Table>

---

## Modified 30/360 Ratable Plan

Aligns revenue with **Monthly Recurring Revenue (MRR)**.

### Key Logic
- Each month = 30 days  
- Term = Total days / 30  
- Revenue evenly distributed across term  

### First Period

(Per-period revenue / Days in month) × Active days

### Last Period

Total Revenue - Recognized Revenue so far

### Remaining Periods

Per-period revenue = Total Revenue / Term

### Example

Contract: $12,000 (03/15/20 → 03/14/21)

<Table>
  <TableHeader>
    <TableRow>
      <TableHead>Period</TableHead>
      <TableHead>Month</TableHead>
      <TableHead>Revenue</TableHead>
      <TableHead>Calculation</TableHead>
    </TableRow>
  </TableHeader>
  <TableBody>
    <TableRow>
      <TableCell>First Period</TableCell>
      <TableCell>March 2020</TableCell>
      <TableCell>$548.39</TableCell>
      <TableCell>$1000 / 31 × 17</TableCell>
    </TableRow>
    <TableRow>
      <TableCell rowSpan={11}>Remaining</TableCell>
      <TableCell>April 2020</TableCell>
      <TableCell>$1000</TableCell>
      <TableCell rowSpan={11}>
        Term = 360 / 30 = 12  
        Per period = 12000 / 12 = 1000
      </TableCell>
    </TableRow>
    <TableRow><TableCell>May 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>June 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>July 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>August 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>September 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>October 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>November 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>December 2020</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>January 2021</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow><TableCell>February 2021</TableCell><TableCell>$1000</TableCell></TableRow>
    <TableRow>
      <TableCell>Last Period</TableCell>
      <TableCell>March 2021</TableCell>
      <TableCell>$451.61</TableCell>
      <TableCell>12000 - 11548.39</TableCell>
    </TableRow>
  </TableBody>
</Table>

---

## Classic Ratable Plan

Uses **actual number of days in the contract (365/366)**.

### First & Last Period
- Prorated by days  
- ≥ 28 days → treated as full month  

### Remaining Periods
Same logic as 30/360 but with actual days.

---

## Daily Ratable Plan

No special handling for first/last periods.

### Formula

Revenue per day = Total Revenue / Total contract days Monthly Revenue = Revenue per day × Active days in month

---

## End Month Exclusive

- First month = full revenue  
- Last month = **0 revenue**  
- Remaining months = equal distribution  

### Example Logic

Monthly Revenue = Total Revenue / Total months (excluding last month)

---

<Note>
Contact [RevRec Support](mailto:revrec-support@chargebee.com) to configure your preferred ratable method.
</Note>