Entitlement Management: How to Recognise Revenue for Prepaid Usage

Engineering teams have to spend countless hours per month maintaining custom entitlement logic. Every minor pricing change requires code deployment. Billing errors cost you lost revenue. Revenue recognition takes manual hours on spreadsheets.

Zenskar handles every stage of the entitlement lifecycle natively and seamlessly — configuration, rollover/expiry, monitoring, invoicing, and revenue recognition. You can tailor it to fit any pricing strategy. No code, workarounds, or process rewrites. Just accurate access control that scales with your business.

What is entitlement management in prepaid-usage revrec

Entitlement management is how you track and control a customer’s prepaid units (credits) and access so you can recognize revenue when you deliver service. In prepaid models, you recognize revenue as units are consumed, and when any remaining credits expire.

Why is entitlements management an engineering burden

Entitlements are units of features, functionalities, products, or services that your customers have access to. It is also referred to as credits or provisioning. Example: usage units, API credits, etc. 

Most billing tools don’t solve entitlements or heavily rely on developers for it. Engineers have to understand the entire billing and revenue system configuration. Every aspect is hard-coded, needs constant maintenance, and rework for even minor changes. It is extremely rigid, leading to manual workarounds and errors.

Creating and managing entitlements on Zenskar

You can configure and manage entitlements with minimal setup time - at product-level, contract-level, or tied to the billing cadence or promotion period. Zenskar supports different types of entitlements.

How Zenskar applies entitlements across order-to-cash

Entitlements are integrated directly into the invoicing logic and revenue logic. Zenskar only needs usage reported for postpaid or prepaid terms. It

• Deducts entitlements for prepaid
• Bills when it is postpaid

Invoicing

Zenskar only needs usage reported for postpaid or prepaid. It checks usage against available entitlements.

• Only excess usage beyond the entitled amount is billed
• Unused entitlements can be configured to expire or roll over, depending on the definition

This is automatically applied at the line item level, across multiple products or tiers, on aggregate usage.

Revenue Recognition

• Deferred revenue increases when entitlements are added
• Revenue is recognized when entitlements are consumed/expired
• Adjusts the estimated transaction price to reflect actual consumption
• Maintains an audit trail for entitlement usage vs. revenue earned

Monitoring

• Sends alerts based on the entitlements balance
• Trigger internal workflows (e.g., sales alerts for upsell, automated provisioning)
• Tracked in the analytics module

How Zenskar helped Yembo recognise revenue for entitlements

Previously, Yembo's revenue recognition system was closely tied to a straight line amortization of contracts, not actual customer usage.

Yembo needed to recognize revenue monthly based on minimum contractual entitlements. If usage exceeded the monthly minimum, they had to recognize the total overage for that period. This meant revenue shouldn’t be a flat amount due to usage fluctuations, but recognition had to occur as usage grants were fulfilled.

Yembo addressed this by leveraging Zenskar's revenue recognition module. This allowed them to apply revenue recognition rules based on accrual accounting principles that recognize revenue based on actual usage data.

With this, Yembo ensured that revenue recognized in a month is truly earned, regardless of when invoices are generated or payments are received.

How Zenskar’s entitlement management outperforms the competition

You can book a free demo or watch our product tour to discover how we help B2B businesses recognize revenue for entitlements with complete accuracy.