In this article, you will discover how membership revenue is recognized and the best ways to track and report membership metrics.
Membership revenue recognition
Memberships offer 2 avenues of revenue:
- Recurring billing - memberships that are charged on an ongoing basis. The charging frequency (daily, weekly, monthly, and yearly) and the term (unlimited or limited to a set number of payments) is managed by the venue in the product configuration.
- Fixed cost - memberships that are charged once based on a fixed cost and can be used for a determined period of time. Once these memberships expire, they do not renew and customers would need to purchase a new membership.
For an ongoing indefinite membership that costs $25per month. The initial upfront payment of $25 will be recognized at the time of the transaction occurring.
The following recurring monthly payments of $25 would be recognized based on each month the guest is charged (this occurs one calendar month after their first initial payment).
Each payment will be recognized for the amount in the set time frame ($25 in this example). ROLLER will recognize these payments as normal revenue based on the time the transaction lands.
With fixed-cost memberships, the total amount charged will be recognized at the time of the transaction occurring.
Tracking and reporting on memberships
There are a few different ways to track and report on memberships.
We suggest creating Reporting Categories for all membership products. Using the GL codes allows the venue to segregate membership data in the Ledger Summary Report.
Important membership reports:
- Memberships - Detailed list of all membership records.
- Membership Redemptions - Detailed log of membership redemption by date.
- Membership Growth - Visualization of membership sales, churn and net growth over time.
- Membership Status Log - Detailed log of membership status changes by date.
- Recurring Payment Log - Detailed log of recurring payments processed, status and values.
- Membership Credits Report - Detailed list of credits against memberships.
You can also view a membership snapshot on your Dashboard