AI validates that revenue is recorded when earned (goods shipped, services delivered), not when invoiced or paid—catching premature revenue recognition and timing errors.
AI compares invoice dates, payment dates, and shipment/delivery dates from your accounting software and transaction records to ensure revenue is recorded in the correct period.
Key validation: Revenue should be recognized when the product ships or service is delivered, NOT when you invoice or receive payment
QuickBooks, Xero, NetSuite, Sage
Access needed: Invoices, revenue entries, customer records, GL transactions
Shipping confirmations, delivery receipts, service completion records
Access via: Email forwarding or document upload
Link your accounting system via read-only API. AI automatically pulls all revenue transactions, invoices, customer data, and GL entries. Set up email forwarding for delivery confirmations.
For each revenue transaction, AI extracts and compares three critical dates: invoice date, revenue recognition date, and delivery/completion date. Flags discrepancies.
When revenue timing doesn't align with delivery/service completion, AI categorizes the exception and sends you a daily digest with adjustments needed.
Review flagged transactions, verify delivery documentation, create adjusting entries in your accounting software. AI provides the exact journal entries needed for each correction.
Problem: Sales team rushes to invoice customers Dec 30-31 to hit year-end targets. Revenue recorded Dec 31, but products ship Jan 2-5.
AI Detection: Flags $47,000 in revenue with invoice dates in Dec but shipment tracking showing Jan delivery.
Why it matters: Financial statements overstated, audit finding, potential SEC issue if public
Problem: Customer signs $24K annual contract, pays upfront. Bookkeeper records full $24K revenue in January.
AI Detection: Identifies annual subscription and recommends deferring $22K (11 remaining months at $2K/month).
Why it matters: Revenue should be recognized ratably over service period—$2K per month for 12 months
Problem: $50K order for 500 units. Invoice sent for full amount. Only 300 units actually shipped (200 backordered).
AI Detection: Compares invoice quantity to shipping confirmation, flags $20K over-recognition (200 units × $100 each).
Why it matters: Can only recognize revenue for what was actually delivered
Problem: Service business delivers consulting in March, sends invoice in April, receives payment in May. Revenue recorded in May (when cash received).
AI Detection: Finds service completion date in March (from project management system or email), flags revenue timing error.
Why it matters: Accrual accounting requires revenue recognition when earned (March), not when paid (May)
Problem: Monthly subscription business recognizes some customers immediately, others ratably, creating inconsistent revenue patterns.
AI Detection: Analyzes revenue patterns across similar contracts, flags inconsistent treatment that could indicate errors.
Why it matters: Consistent application of revenue recognition policies required for accurate financials
Accurate revenue recognition = reliable financials + cleaner audits + better decision making
5-minute setup. Test 100% of revenue transactions. Catch timing errors before your auditor does.