Revenue Recognition

9 Months Ended

Apr. 30, 2012

Revenue Recognition [Abstract]

Revenue Recognition

3. Revenue Recognition

The Company’s revenues from its six product lines are the result of separate, individual deliverables:

	Type of Revenues Earned
Product Line	Equipment/ Software		Professional Services		Maintenance Contracts
Millennium PBX System		Individual sale
eQueue Contact Center System		Individual sale		Individual sale		Individual sale
VOIP Telephones		Individual sale
Cortelco Products		Individual sale
CSPR Products		Individual sale		Individual sale		Individual sale
CSPR Telephony Billing				Individual sale

Some customers contract for professional services to tailor their system to specific requirements. Professional services are invoiced separately upon completion. eQueue customers can also elect to enter into maintenance contracts to receive software updates and free technical support. Revenue is recognized quarterly for each maintenance period as provided.

The VOIP telephones can be deployed with either the Millennium or eQueue systems to provide lower call costs as well as flexible telecom management across multiple locations. These phones may be sold with a new system, but are often sold subsequent to the system sale.

Cortelco sells corded and cordless analog and digital telephones capable of operating in the multiple PBX, Key System and Centrex environments primarily through stocking distributors.

Telephony billing revenues from the resale of Puerto Rico Telephone services are recognized monthly as services are provided to customers.

The Company records shipping and handling fees billed to customers as revenue, and shipping and handling costs incurred with the delivery of products as cost of sales.

Revenues from our products are recognized only when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the customer is fixed or determinable, and collectability is reasonably assured. Generally, revenue is recognized (i) upon shipment for equipment and software, (ii) as work is performed for professional services, and (iii) in equal periodic amounts over the term of the contract for software and hardware maintenance.