1 min lesson
Allocating with SSP
Compare two rows from "Allocating with SSP", then say when each one fits.
Step 1 of 2
Allocating with SSPwhere bundles get interesting
SSP is the price you would charge for an item sold on its own. When a deal bundles a platform subscription with discounted onboarding, you do not honor the line-item prices on the quote. You allocate the total contract price across obligations in proportion to their standalone values, which can move revenue between lines.
- Recognition pattern
- Over time
- Example / SSP
- Annual subscription / $100,000
- Allocated price
- $91,667
- When it fits
- The subscription service transfers continuously, so recognize it ratably over 12 months.
- Recognition pattern
- Point in time
- Example / SSP
- Onboarding / $20,000
- Allocated price
- $18,333
- When it fits
- The distinct onboarding service is satisfied at completion, so recognize it then.
- Recognition pattern
- Allocation check
- Example / SSP
- Contract SSP / $120,000
- Allocated price
- $110,000
- When it fits
- Use the total to confirm the allocated prices equal the discounted transaction price.
| Recognition pattern | Example / SSP | Allocated price | When it fits |
|---|---|---|---|
| Over time | Annual subscription / $100,000 | $91,667 | The subscription service transfers continuously, so recognize it ratably over 12 months. |
| Point in time | Onboarding / $20,000 | $18,333 | The distinct onboarding service is satisfied at completion, so recognize it then. |
| Allocation check | Contract SSP / $120,000 | $110,000 | Use the total to confirm the allocated prices equal the discounted transaction price. |
A $10k bundle discount allocates ~83% to the subscription and ~17% to onboarding by SSP ratio, not where the rep put it on the quote.