# Ratable - 30/360 Method

Recognized over time where the number of days in a year is considered to be 360
(12 months in a year, each with exactly 30 days).

The ratable 30/360 method is very similar to [ratable daily revenue recognition](/docs/add-ons/revenue-recognition/revenue-recognition-ratable-daily),
except that it treats all months as if they have exactly 30 days, which can help
make the numbers a little easier to work with.

## When to use ratable - 30/360

Ratable revenue recognition is often used for subscription revenue, particularly
with longer-term (for example: quarterly or annual) subscriptions.

Ratable revenue, also known as revenue recognized over time, should be used where
revenue is recognized as the customer receives value from services provided over a
period of time, instead of all at once at the time of sale.

:::tip

Talk to your accountant or tax advisor!

Your accountant or tax advisor is your best resource for determining how your business should be recognizing revenue.

:::

## Example

Let's look at an example for a yearly invoice created on `Jul 20, 2025`, with
service dates of `July 20, 2025 - July 19, 2026` (a one-year term).

| Period | Month     | Revenue   | Explanation |
|--------|-----------|-----------| ----------- |
| First period | Jul 2025 |	$ 40.00 | 12 days in July / 360 days total * $ 1,200.00 |
|  | Aug 2025 |	$ 100.00 |
|  | Sep 2025 |	$ 100.00 |
|  | Oct 2025 |	$ 100.00 |
|  | Nov 2025 |	$ 100.00 |
|  | Dec 2025 |	$ 100.00 |
|  | Jan 2026 |	$ 100.00 |
|  | Feb 2026 |	$ 100.00 |
|  | Mar 2026 |	$ 100.00 |
|  | Apr 2026 |	$ 100.00 |
|  | May 2026 |	$ 100.00 |
|  | Jun 2026 |	$ 100.00 |
| Last period | Jul 2026 |	$ 60.00 | Remaining revenue |
| **Total** | | **$1,200.00** |