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Turn on revenue recognition in QuickBooks Online

by Intuit•1• Updated a day ago

Learn how to turn on revenue recognition in QuickBooks Online Advanced.

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Before you can set up a revenue recognition schedule, you need to turn on revenue recognition in your settings. If you don’t want to use any existing templates, you’ll also need to make your own.

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Turn on revenue recognition

  1. Go to Settings Settings gear icon., then select Account and settings (Take me there).
  2. Select Sales. 
  3. In Products and services, select Edit ✎.
  4. Turn on Revenue recognition.
  5. Select Save, then Done.

Create or manage custom revenue recognition templates

Instead of using pre-built templates, you can create custom templates to manage revenue recognition for invoices.

  1. Go to Advanced accounting, then Revenue recognition (Take me there).
  2. If this is your first time visiting this page, select Get started. Otherwise, select Manage settings Dropdown arrow icon. then Manage templates.
  3. If none fits, select Add new template.
  4. Enter a name for this template, then select the recognition method, frequency and period.
  5. When finished, select Save.

These recognition methods are available in both QuickBooks Online and Intuit Enterprise Services

  • Straight-line, calculates evenly across all periods. Select the recognition frequency, and the recognition period in months.
  • Straight-line, calculates by number of days in period. Select the recognition frequency, and the recognition period in months.
  • The following recognition methods are only available in Intuit Enterprise Services.
  • One-time future event. Recognize revenue when you receive the payment. You’ll set the due date on the invoice.
  • Percentage. Choose the recognition frequency, and the recognition period in months, then enter the schedule details. Enter a percentage of the total revenue you want to recognize for each period. Note that the percentage distribution must all add up to 100% total.
  • Milestone. This method is ideal for project-based work, which your business tracks milestone accomplishments. Name one or more milestones, then the percentage (out of 100%) of the total revenue each represents. You can add or remove milestones as needed.

Post requisites

After you’ve turned on revenue recognition, you can set up a revenue recognition schedule for recurring services or product payments you issue to customers.

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