SaaS Revenue Recognition and Invoicing: Deferred Revenue, Performance Obligations, and Timing Gaps
The core tension in SaaS finance is that three timing points do not align. Collection, invoicing and revenue recognition are each independent, and forcing any two together breaks the third. Recognising on invoice inflates the current period; recognising on collection distorts cross-period prepayments. Only recognition on performance progress is correct, and it requires the system to compute what was delivered in a period.