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B
Benjamin09
January 8, 2020
Question

Recognize revenue for licenses sold included in invoices

  • January 8, 2020
  • 1 reply
  • 9 views

Hi,

 

I would like to know what is the best way to invoice  clients for software licenses  (like QBO :P).

How can we accelerate the process with 50 current license to accrure each month ?

 

Context:

- Knowing that the license is for a specific period, lets say 1 year, and that we have to recognize a portion of  revenue from this license sold each month.

- I can set a service linked to an unrecognized revenue account ( liability account)

- Can we automate revenue recognition based on a << service date period fiel>> in QBO ? Or should I track the revenue recognition in an excel file ?

 

Ex : we sell 1 licence for 100 CAD for the following period :January 01 2020 to December 31 2020

1 reply

A
AileneAModerator
Moderator
January 8, 2020

Hi there, @Benji09. 

 

Thank you for posting to the Community. 

 

We can accelerate the process by dividing it. Instead of creating one transactions for whole year we can divide it, then we need to create recurring transaction per month. This allow your customers the options to choose when and how much to pay.

 

To create recurring transaction here's how:  

  1. On the left pane click Sales. 
  2. Under Customers, select create Invoice. 
  3. Fill out the form with information you want to appear in every invoice. 
  4. Under Payment Option, select the type of payments that you accept. 
  5. Select Make recurring. 
  6. Personalize the Recurring Invoice 
  7. Once done Save template. 

 

 

  

  

Once finished, you'll be able to view the recurring invoice on Recurring Transactions. 

 

I've attached additional article to help you guide on how to set schedule for recurring transactions: 

 

I'm just a post away if you should have any questions. Have a lovely day.

    B
    Benjamin09Author
    January 9, 2020

    Thanks for your answer!

    So if I understand I will only send one invoice to the clients with service item linked to deferred revenue liability account.

    And at the en of each month an automated invoice will be created with two service items :

    - 1 item to the portion from deferred revenue

    - 1 item to recognize the portion of the monthly revenue

    So the total of each recurring invoice will be 0$.

     

    Looks fine to me ! 

     

    Suggestion to QBO DEV : a period field with starting and ending date would be amazing to automate revenue recognition and immobilization amortization I guess ?!

     

    J
    JonpriL
    Level 9
    January 9, 2020

    You're on the right track, @Benjamin09!

     

    I'll also take note of your request and submit it directly to our developers so they'll know of your need to customize a certain field for preferred dates.

     

    I've got you these articles for future updates about the features of our product:

    Keep me posted in the comment section down below if you have any other questions. I'm always around happy to lend a helping hand.

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