revenue-recognition-health

name	revenue-recognition-health
description	ASC 606 / IFRS 15 health check: deferred vs recognized revenue, waterfall variance, and anomaly flags for the controller or finance team. Use when the user asks about revenue recognition, deferred revenue, rev-rec health, or month-end close compliance. Do NOT use for MRR, ARR, or cash collection questions.
when_to_use	Trigger on: "revenue recognition", "rev-rec health", "deferred revenue", "recognized revenue", "asc 606", "ifrs 15", "month-end rev-rec", "deferred vs recognized", "revenue waterfall variance", "revenue compliance".
argument-hint	[period — e.g. 'last month' for month-end close]

Revenue Recognition Health

ASC 606 / IFRS 15 health monitor for finance and controllers. Notify-only.

Setup

Resolve org ID via ZohoBilling_List_all_Organizations. Default period: last month (typical use is month-end close).

Fetch (run in parallel)

#	Tool	Purpose
1	ZohoBilling_Get_Recognized_Revenue_Report	Total recognized revenue
2	ZohoBilling_Get_Recognized_Revenue_Details_Report	Per-item recognized detail
3	ZohoBilling_Get_Recognized_Revenue_by_Customer_Report	Customer-level outliers
4	ZohoBilling_Get_Deferred_Revenue_Report	Total deferred revenue
5	ZohoBilling_Get_Deferred_Revenue_Details_Report	Per-item deferred detail
6	ZohoBilling_Get_Deferred_Revenue_by_Customer_Report	Customer-level deferred
7	ZohoBilling_Get_Revenue_Waterfall_Report	Starting → earned → ending
8	ZohoBilling_Get_Revenue_Waterfall_Details_Report	Line-item waterfall

Output

Revenue Recognition Health — [Period]
────────────────────────────────────────────────────────────────────────
Recognized this period:  $XXX,XXX
Deferred (balance):      $XXX,XXX
Deferred-to-recognized:  X.X× ratio  [🟢 Healthy | 🟡 Watch | 🔴 Review]

REVENUE WATERFALL
  Opening deferred:    $XXX,XXX
  + New bookings:      +$XX,XXX
  − Earned (recognized): −$XX,XXX
  Closing deferred:    $XXX,XXX  (Δ +/-$X,XXX vs last period)

ANOMALY FLAGS
  ⚠ [Customer X]: $XX,XXX deferred — unusually large single-customer concentration
  ⚠ Recognized revenue variance: actual $X vs expected $Y — investigate timing

MONTH-END CLOSE CHECKLIST
  ☐ Deferred balance reconciles to contract values
  ☐ No items recognized before delivery (early recognition risk)
  ☐ Large deferred balances > $10,000 reviewed individually
  ☐ Waterfall closing balance matches prior-period opening
────────────────────────────────────────────────────────────────────────

Deferred-to-recognized ratio bands:

Ratio	Call
< 1.5×	🟢 Healthy — earning out at a good pace
1.5–3×	🟡 Watch — large deferred balance building
> 3×	🔴 Review — potential recognition timing issue

Constraints

• Month-end checklist is static — always include it regardless of anomalies
• Customer concentration = single customer > 20% of total deferred
• Propose-only: no journal entries, no revenue schedule changes

Edge cases

• No deferred revenue: "No deferred revenue balance — all revenue recognised immediately (check if deferred tracking is enabled)"
• Waterfall doesn't reconcile (closing ≠ opening + new − earned): flag as "⚠ Waterfall does not reconcile — manual review required"