Set up a revenue recognition schedule in QuickBooks Online Advanced
by Intuit• Updated 6 days ago
Learn how to set up an automatic schedule to help with revenue recognition in QuickBooks Online Advanced.
Revenue Recognition is a generally accepted accounting principle (GAAP) that defines how and when you recognise revenue. For all businesses on an accrual basis, revenue is recognised when it’s earned, not when money is exchanged. A common scenario for this is a pre-paid or subscription service.
Why Revenue Recognition is important
Here are some business models that may use revenue recognition.
Business Model | Product or Service example |
Subscription based | A wine club charges a membership fee on top of subscription fees and wants to recognise the membership revenue upfront but defers wine subscription revenue until they can deliver to the customer. |
Project based / contractors | A project-based business or a contractor, who charges their customers upfront, wants to recognise some of the revenue only when that part of the job is complete. |
Software | A hosted software company that charges S $240 yearly and recognises S $20 every month until the software agreement ends. |
E-commerce | E-commerce businesses receive payment upfront but recognise the revenue upon delivery. |
Pre-paid Billing | An insurance company charges an annual premium at a discount, but the revenue is recognised monthly. |
Consulting Services / Law Firms | A law firm charges its client a retainer fee before rendering services and wants to recognise the revenue only when the work is complete. |
Find out about cash and accrual accounting methods in QuickBooks Online.
Run the Revenue Recognition report
You can see the billed and recognised amounts in the Deferred Recognition Detail for each column.
- Go to Reports (Take me there).
- In the search bar, search for and open Revenue Recognition Report.
Customise or filter the report as you see fit.
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