TLDR; Currently, we are unable to easily cancel a Revenue Recognition schedule once a sales order has been invoiced. I request that Microsoft create a simple button to process the cancelation of future revenue schedules, rather than requiring the creation of a contra-revenue schedule and unnecessary GL postings.


The thought of the Microsoft product team is that when a subscription/contract is cancelled, there has to be a credit note/return doc created in order to reflect the cancellation. Because the customer was invoiced for the full amount, they have to be given a return. The credit note would be for the contract date range of what is cancelled, along with the amount of each period. And the negative amount would offset the amount of the original invoice because the amounts and periods should align.

This is an extreme oversimplification of the processes by which subscription-based businesses operate. In reality, most do not bill entirely upfront for the full amount of the contract - billing is based on installments spread over the life of the contract. This in itself (billing schedules) is a feature that was previously promised to be released but has been continually delayed by Microsoft, so in our instance we have had to customize our solution to fill this gap.

Because of this, we have two separate processes now - one to cancel the future billings and another to cancel the future revenue. Since we customized the billing process ourselves, it's accomplished with the simple push of a button. Then a user still needs to manually calculate the amount of revenue yet to be recognized and post a credit note for that amount for the remaining dates of the contract.

This is a very common occurrence for subscription-based businesses, e.g., where a customer decides midway through an order to cancel and upgrade to a new subscription. When you have thousands of orders in your system and have to process many cancelations in a given fiscal period, it is a lot of unnecessary manual work to perform.