Cut-Off Testing for Subscription Cancellations

Cancellation requests arrive through support tickets, self-serve portals, and account managers. The timestamp that matters for revenue is rarely the one the customer remembers—it is the effective end of access and the related refund or credit rules.

Cut-off testing compares cancellation events near period-end with revenue and deferred balances. We look for services that continued after the recorded end date, and for revenue that stopped while access was still live. Both create avoidable audit findings.

Refund timing deserves equal attention. A credit issued in the next period for a cancellation that took effect in the prior period can leave deferred revenue inflated if the liability was not adjusted.

Keep a simple control owner for cancellation cut-off. When finance, support, and billing each assume someone else owns the date, the ledger inherits the gap.