Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteShort answer: Under IFRS 15 and ASC 606, a SaaS company reports customer consideration gross when it controls the promised good or service before transferring it to the customer (it is the principal). It reports only its retained fee or commission net when it merely arranges for another party to provide that service (it is the agent). The conclusion is specific to each contract and transaction flow; there is no universal percentage of SaaS revenue that should be gross.
What gross and net revenue mean for a SaaS company
Gross-versus-net presentation is not a choice based on which figure looks better. It is the accounting result of the principal-versus-agent assessment in IFRS 15 or ASC 606. Revenue depicts the consideration a company expects to receive for services it transfers to a customer. Cash collected, invoices issued, bookings and billings can be different amounts.
As an Amazon Associate I earn from qualifying purchases.
A company is a principal when it controls a promised good or service before that good or service is transferred. It records the amount charged to the customer as revenue and records related supplier costs or other fulfillment costs separately when those costs are expenses. A company is an agent when its promise is to arrange for another party to provide the service. It records only the fee, commission or other retained amount as revenue.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
IFRS Foundation guidance describes the objective this way: revenue should depict “the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The Australian Accounting Standards Board similarly states that an agent records the management or administration charge, fee or commission to which it expects to be entitled.
#1 Best Overall
- Read Before You Buy — No Video Output: These adapters support charging and USB 2.0 data transfer, but cannot transmit video signals. Except for standard USB webcams (which use USB data only), they are not compatible with HDMI/DisplayPort cables, video-capable USB-C hubs, or docking stations with video output.
- Convert USB-A Ports to USB-C: Designed to connect USB-C earphones, cables, flash drives, card readers, and other USB-C accessories to standard USB-A ports. Plug-and-play with no drivers or software required.
- Aluminum Alloy Housing: Built with a sturdy aluminum alloy shell that aids in heat dissipation and protects against daily wear and scratches. Designed to maintain a stable and secure connection.
- Compact & Travel-Friendly: The ultra-compact design allows the adapter to stay plugged into your device without blocking adjacent ports or adding bulk, reducing wear and tear on your original USB ports.
- 12-Month Warranty: Backed by a 12-month manufacturer warranty for peace of mind. Designed to meet strict quality control standards for reliable everyday performance.
The analysis must be documented for each material flow, such as direct subscriptions, implementation work, usage charges, marketplace services, reseller products and bundled third-party features. A conclusion for one contract cannot automatically be applied to every other contract.
How to decide whether you are principal or agent
IFRS 15 and ASC 606 identify indicators that help establish whether the company controls the underlying service. The indicators are evaluated together. No single factor is automatically decisive.
| Question | Evidence supporting principal (gross) | Evidence supporting agent (net) |
|---|---|---|
| What does the customer contract promise? | Your company promises to provide the underlying platform, service or deliverable. | Your company promises only to arrange access to another provider’s service. |
| Who is primarily responsible for fulfillment? | You are responsible to the customer for delivering the service, meeting specifications and addressing service failures. | The third-party supplier is responsible for delivery and the customer’s remedy is mainly against that supplier. |
| Who controls the service before transfer? | You can direct how the service is provided, substitute resources or otherwise control it before the customer receives it. | You never obtain control; you connect the customer with the supplier. |
| Who bears service-delivery or inventory risk? | You bear meaningful risk if the supplier fails, capacity is unavailable or the service must be redelivered. | The supplier bears the delivery risk and you are generally entitled to your fee regardless of fulfillment. |
| Who sets the price? | You have meaningful discretion to establish the customer price. | The supplier controls pricing and your amount is a stated commission or spread. |
| Who can change the service? | You can modify, combine or replace components before transfer. | You cannot alter the underlying service and simply pass the supplier’s offer through. |
These indicators can point in different directions. For example, a platform may set the customer price but still be an agent if it never controls the third-party service and is not responsible for fulfillment. Conversely, a reseller may be the principal even when another company performs the physical work if the reseller controls the promised service and is responsible for the customer outcome.
Quick wins for a faster PC:
Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →Revenue is not the same as cash, billings or SaaS metrics
Founders often call every customer-related inflow “revenue.” Financial statements use a narrower concept: consideration for performance obligations that have been satisfied. Keep operating metrics separate and label them clearly.
| Measure | What it represents | Why it is not a substitute for reported revenue |
|---|---|---|
| Cash collections | Money received in the bank. | Cash can arrive before service delivery, after delivery, or include taxes and amounts owed to suppliers. |
| Billings | Amounts invoiced under contracts. | An invoice can cover future months and therefore create a contract liability rather than current revenue. |
| Bookings | Contracted commitments or signed orders, according to the company’s definition. | A booking may never be delivered, may be cancellable, or may include obligations recognized over several periods. |
| MRR and ARR | Recurring monthly or annualized subscription run rate used by management. | They are non-GAAP/non-IFRS operating measures and may exclude usage, one-time work, discounts, churn effects or accounting adjustments. |
| Gross merchandise value | Total value flowing through a marketplace. | It can include supplier amounts that are not the platform’s revenue when the platform is an agent. |
Where non-GAAP metrics are presented, define the calculation, identify the period and reconcile them to recognized revenue when applicable. Do not describe ARR, MRR or billings as revenue without qualification.
Rank #2
- 5-in-1 USB-C Hub: Experience comprehensive connectivity featuring a Power Delivery input, two USB-A 2.0 ports, a USB-A 3.0 port, and an HDMI port. (Note: The USB-C power delivery input port is only for connecting an external wall charger to power your laptop and cannot power peripheral devices.)
- 90W Pass-Through Charging: Achieve optimal charging with 90W pass-through power to your laptop, supported by a total input of 100W, with the hub reserving 10W for operational efficiency. (Note: Wall charger not included.)
- Quick Data Transfers: Accelerate your productivity with rapid data transfers using a high-speed 5Gbps USB 3.0 port and two 480Mbps USB 2.0 ports.
- 4K HDMI Display: Enhance your visual experience with a hub capable of delivering 4K resolution at 30Hz in both mirror and extend modes. Please note that this hub is compatible with MacBook (macOS 12 and newer), Windows 10 and 11, ChromeOS, and laptops equipped with DP Alt Mode and Power Delivery. Note: This device is not compatible with Linux.
- What You Get: Anker USB-C Hub (5-in-1, 4K HDMI), welcome guide, 18-month warranty, and our friendly customer service.
Apply the five-step revenue process
Use the same disciplined sequence for every material contract family. Preserve the analysis and the evidence supporting each judgment.
-
Identify the contract and enforceable rights
Confirm that the arrangement has been approved, each party’s rights and payment terms are identifiable, the arrangement has commercial substance and collectability is probable under the applicable standard. Review order forms, online terms, renewal language, cancellation rights, service-level commitments and side agreements. A verbal sales promise that changes the customer’s rights can affect the accounting even if it is absent from the standard template.
Recommended Free Tools
Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy. -
Identify distinct performance obligations
List every promise: hosted access, implementation, data migration, training, support, usage services, hardware, third-party subscriptions and professional services. A promise is distinct when the customer can benefit from it on its own (or with readily available resources) and it is separately identifiable from other promises. A highly integrated implementation may instead be combined with hosted access. Document why each item is separate or combined.
-
Determine the transaction price
Start with the consideration you expect to be entitled to for transferred services. Include fixed fees and estimate variable consideration such as usage charges, rebates, service credits, incentives, refunds and cancellation amounts. Apply the applicable constraint so that variable consideration is included only to the extent a significant reversal is not probable when the uncertainty resolves.
Exclude amounts collected on behalf of governments or other third parties when the company has no entitlement to them. Sales tax and VAT commonly fall into this category, but the conclusion depends on the jurisdiction, contract and company policy. A tax collected for remittance is not automatically revenue just because it appears on the customer invoice.
Rank #3
Sale
Anker USB C Hub, 7in1 Multi-Port USB Adapter, 4K@60Hz USBC to HDMI Splitter | 85W Max PD, 2 USB 3.0 & 1 USBC Data Ports, SD/TF Card Reader, for Laptops/Mac and Other Type C Devices (Charger Not Included)- Sleek 7-in-1 USB-C Hub: Features an HDMI port, two USB-A 3.0 ports, and a USB-C data port, each providing 5Gbps transfer speeds. It also includes a USB-C PD input port for charging up to 100W and dual SD and TF card slots, all in a compact design.
- Flawless 4K@60Hz Video with HDMI: Delivers exceptional clarity and smoothness with its 4K@60Hz HDMI port, making it ideal for high-definition presentations and entertainment. (Note: Only the HDMI port supports video projection; the USB-C port is for data transfer only.)
- Double Up on Efficiency: The two USB-A 3.0 ports and a USB-C port support a fast 5Gbps data rate, significantly boosting your transfer speeds and improving productivity.
- Fast and Reliable 85W Charging: Offers high-capacity, speedy charging for laptops up to 85W, so you spend less time tethered to an outlet and more time being productive.
- What You Get: Anker USB-C Hub (7-in-1), welcome guide, 18-month warranty, and our friendly customer service.
-
Allocate consideration to the obligations
When a contract contains more than one performance obligation, allocate the transaction price based on relative standalone selling prices unless a specific allocation exception applies. Use observable prices for separately sold components where available. If a component is not sold separately, support an adjusted-market, expected-cost-plus-margin or residual estimate, and retain the assumptions and updates.
The Tool Desk
Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy. -
Recognize revenue as each obligation is satisfied
Recognize revenue when control transfers. Continuous hosted access is commonly a stand-ready service satisfied over time, often ratably when the customer receives an even pattern of benefit. A separately delivered license, hardware item or completed implementation may be satisfied at a point in time. Usage-based services follow the pattern in which the customer receives the service, using the contract’s usage data and estimation policy.
Common SaaS arrangements and their accounting
Pure hosted subscription
Suppose a customer prepays $12,000 for 12 months of platform access, including routine updates and support, with no separate implementation obligation or material financing component. At billing, record the cash and a contract liability (often called deferred revenue). Recognize $1,000 per month as the stand-ready service is provided. The annual prepayment is not $12,000 of revenue on day one because the service has not yet been transferred.
Implementation, training and support bundled with access
Do not automatically defer every invoice for the same period. Determine whether implementation or training is distinct. A separately usable training course may be recognized as delivered; a significant integration that creates or modifies the hosted service may be recognized over the integration period or combined with the subscription obligation. Allocate the contract price using relative standalone selling prices rather than assigning the entire discount to the first item delivered unless the facts support that result.
Marketplace or reseller service
If your platform controls a third-party service before transfer, is primarily responsible to the customer and has meaningful pricing discretion, it generally presents the customer charge gross and records the supplier cost separately. If the platform only arranges the supplier’s service and retains a commission, it presents the commission net.
Rank #4
- Dual Converters, Infinite Potential：Includes 2× USB C male to USB A female adapters and 2× USB A male to USB C female adapters. Perfect for a wide range of uses—tablets with Bluetooth keyboards, expand USB ports on macbook, and more. Two different converters for all your daily needs
- Next-Level 10Gbps & 3A Charging: No more slow 480Mbps, this usb to usb c adapter has a transfer speed of up to 10Gbps, allowing you to do more transferring in less time. This usb adapter fits both USB A and USB C charger, supporting up to 3A fast charging
- Upgraded Exquisite Craftsmanship: With an aluminum alloy housing and metal connector, the usbc to usb adapter is extremely durable and sturdy. Rigorously tested to withstand more than 10,000 times of plugging and unplugging, ensuring long-lasting performance
- Broad Compatible: The usb c to usb adapter widely supports all USB C/ USB A devices like laptops, tablets, cellphones, car chargers, and phone chargers. Such as compatible with MacBook Pro/Air 2023/2022, Thunderbolt 4/3 Devices,Apple MagSafe Watch 9/8/7/SE/Ultra, iPad Pro 2022/2021, Samsung Galaxy S23/S20/S10, and iPhone 17/16/15 Pro. Plug and play
- Please Note: To reach 10Gbps speed, keep the cable under 3.3 ft. For USB A Male to USB C adapters, try flipping the USB C connector. USB C Male to USB A adapters support bidirectional 10Gbps transfer within 3.3 ft
Consider the actual promise, not the label “reseller.” Review cancellation and refund obligations, service-level guarantees, who selects and can replace the supplier, who bears failure risk, and whether the customer views your company or the supplier as responsible for delivery. A contract can contain both principal and agent components, requiring gross presentation for one obligation and net presentation for another.
Payment-processing fees and ordinary operating costs
Do not net ordinary payment-processing fees, hosting costs, cloud infrastructure, employee costs or sales commissions against revenue merely because they reduce cash received or margin. If your company is the principal for the SaaS service, those amounts are generally expenses under the relevant accounting guidance. The principal-agent analysis applies to the promised service being transferred, not to every cost incurred in collecting payment or operating the platform.
Sales tax and VAT
Assume a $1,000 subscription and $80 sales tax collected for remittance to the tax authority. When the company is collecting the $80 on behalf of the authority, the transaction price and revenue are generally $1,000, not $1,080. Maintain a written tax policy because registration, marketplace-facilitator rules and contractual responsibility differ by jurisdiction. The accounting conclusion should follow the company’s obligation and entitlement, not simply the invoice layout.
Refunds, cancellations, credits and chargebacks
If a customer can obtain a refund for unused service, recognize revenue only for the service transferred and record a refund liability for the amount expected to be returned. When the refund is paid, settle the liability against cash; do not treat the unearned portion as earned revenue first. Update estimates for expected credits, rebates and cancellations each reporting period.
Chargebacks and disputed card payments require the same focus on the underlying obligation. Determine whether the customer received the service, whether a refund obligation exists and whether the amount is collectible. A processor’s temporary hold is not by itself a reason to reduce revenue; the contract and expected consideration determine the accounting.
Best Value
- 5-in-1 Connectivity: Equipped with a 4K HDMI port, a 5 Gbps USB-C data port, two 5 Gbps USB-A ports, and a USB C 100W PD-IN port. Note: The USB C 100W PD-IN port supports only charging and does not support data transfer devices such as headphones or speakers.
- Powerful Pass-Through Charging: Supports up to 85W pass-through charging so you can power up your laptop while you use the hub. Note: Pass-through charging requires a charger (not included). Note: To achieve full power for iPad, we recommend using a 45W wall charger.
- Transfer Files in Seconds: Move files to and from your laptop at speeds of up to 5 Gbps via the USB-C and USB-A data ports. Note: The USB C 5Gbps Data port does not support video output.
- HD Display: Connect to the HDMI port to stream or mirror content to an external monitor in resolutions of up to 4K@30Hz. Note: The USB-C ports do not support video output.
- What You Get: Anker 332 USB-C Hub (5-in-1), welcome guide, our worry-free 18-month warranty, and friendly customer service.
Gross-versus-net decisions founders should document
Create a principal-agent memo for each material transaction flow and update it when the contract, supplier model or customer promise changes. The memo should identify:
- The exact customer promise and the underlying service transferred.
- The party responsible for fulfillment, service levels, refunds and customer support.
- How and when your company obtains control before transfer.
- Pricing authority, supplier substitution rights and exposure to delivery or capacity risk.
- Whether the arrangement contains principal and agent components.
- The gross or net conclusion, the indicators supporting it and any contradictory evidence.
- The accounting entries, reporting presentation and required disclosures.
Have your accountant or auditor review unusual reseller, marketplace, usage-based, payment-processing or bundled arrangements. The conclusion depends on contract wording, jurisdiction and facts; a short memo is not a substitute for analyzing the actual rights and obligations.
Operational workflow from invoice to financial statements
- Map data sources. Connect contracts, invoices, usage records, tax calculations, refunds, credits, chargebacks and cash receipts. Identify which system is authoritative for each field.
- Separate consideration types. Tag subscription fees, implementation, usage, taxes, supplier pass-through amounts, discounts and refunds before posting journal entries.
- Run the revenue schedule. For over-time obligations, calculate the service period and daily or monthly pattern. For point-in-time obligations, require an evidence-of-transfer event such as acceptance, delivery or completion.
- Reconcile balances. Tie recognized revenue to subledgers and reconcile billings, contract liabilities, accounts receivable, cash collections, refunds and taxes. Investigate timing differences rather than forcing the ledger to equal cash.
- Review estimates. Reassess variable consideration, expected refunds, credits, cancellations and collectability each reporting period. Record changes prospectively or retrospectively as required by the applicable standard.
- Monitor contract changes. Treat upgrades, downgrades, renewals, add-ons and supplier changes under the modification guidance. A modification can be a separate contract, a termination and replacement, or a cumulative catch-up depending on the facts.
Frequent mistakes and how to correct them
- Recording annual prepayments as immediate revenue. Move the unearned balance to a contract liability and recognize it as access is provided.
- Using cash collected as the revenue number. Remove taxes and other third-party collections, and account for timing differences and refunds.
- Netting every cost against sales. Keep principal-service operating costs in expense accounts unless the underlying arrangement makes the company an agent.
- Applying one principal-agent conclusion to all products. Analyze each distinct flow; a direct subscription can be gross while an arranged third-party add-on is net.
- Ignoring variable consideration. Estimate expected credits, rebates and refunds and constrain amounts that could reverse materially.
- Calling ARR or bookings GAAP revenue. Define management metrics and reconcile them to financial-statement revenue where relevant.
- Failing to retain evidence. Keep contracts, standalone-selling-price support, tax policy, refund estimates, principal-agent memos and reconciliations in an auditable file.
What to disclose and explain
Financial statements should explain significant revenue categories, performance obligations, timing of satisfaction and contract balances in accordance with IFRS 15 or ASC 606. Describe judgments that materially affect the amount and timing of revenue, including principal-versus-agent conclusions, allocation methods, standalone selling-price estimates and variable-consideration constraints.
If your business reports non-GAAP metrics such as ARR, MRR, bookings or billings to investors, define them consistently, identify that they are operating metrics and explain material differences from recognized revenue. A clear bridge prevents readers from interpreting a run-rate measure as an accounting total.
Decision checklist for a founder
- Have we identified the service the customer believes we promised?
- Do we control that service before transfer, or only arrange another party’s service?
- Who is responsible when delivery fails, capacity is unavailable or the customer requests a refund?
- Who sets price and bears service-delivery risk?
- Are taxes and other third-party collections excluded from transaction price?
- Are annual prepayments recorded as contract liabilities until service is delivered?
- Have we separated distinct implementation, training, support and usage obligations?
- Have we estimated and constrained refunds, credits, rebates and cancellations?
- Are payment fees, hosting and commissions being treated as expenses rather than incorrectly netted?
- Can we reconcile billings and cash to recognized revenue and explain every difference?
Frequently Asked Questions
Should subscription payments be reported before payment-processor fees?
If your company is the principal for the SaaS service, report the consideration for that service as revenue and record payment-processing fees as expenses. Net presentation is appropriate only when the company is an agent for the underlying service.
Is an annual SaaS prepayment revenue or deferred revenue?
It is initially a contract liability (deferred revenue) and becomes revenue as the hosted service and other performance obligations are delivered.
Is there a standard gross-revenue percentage for SaaS companies?
No. IFRS 15 and ASC 606 provide a contract-specific principal-agent framework, not a cross-company benchmark percentage.
PC Slower Than It Used to Be?
A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11Outdated Drivers Are Slowing You Down
One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchCan one SaaS contract have both gross and net components?
Yes. A company can be principal for its hosted platform and agent for an arranged third-party service in the same customer arrangement, with each obligation assessed separately.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
