Deferred Revenue

Welcome to Community, @malo21.

I'll share some insight about mapping customer invoices. QuickBooks record invoices to income and accounts receivable (A/R) by default. Thus, mapping them to deferred revenue is un-available. You'll have to record a journal entry.

I recommend consulting an accountant for best way to handle deferred revenue. You can visit our site to find an accountant near you: Find a ProAdvisor.

Here are some additional resources that'll help you manage customer-related tasks.

• How to link a bank deposit to an invoice.
• Topics about your company's income and customers.

Feel free reply to this thread if you have follow-up questions or concerns about mapping invoices. I'm more than willing to assist you. Take care and have a great day ahead.

Is there any version of QB that allows for an invoice to be mapped to deferred revenue rather than reveune?

I recognize how important it is to map the invoice to deferred revenue in QuickBooks Online (QBO), @malo21.  I'm here to share some insight into your concern.

Currently, we don't have a version of QBO that allows an invoice you can map to deferred revenue. As my colleague mentioned above, you'll have to record them as a journal entry. You can also seek an accountant for other ways to handle deferred revenue in QBO.

For now, I recommend sending a feature request directly to our Product Development team. This helps us improve your experience and the features of the program. You can submit them directly from your QBO account. 

Here's how:

1. Go to the Gear icon at the top.
2. Select Feedback.
3. Type in your feedback and suggestions about having an option to disable QBO advertisements.
4. Click Next to submit them.
   
   
   

Furthermore, I'm attaching this link that can efficiently guide you in supervising your account: Learn about QuickBooks Online with how-to videos.

Please know that you're always welcome to post a reply in this thread, @malo21. If you have any other questions about your QBO account, I'll be here to assist you. Keep safe!

Im sorry  - I asked this question a couple times here, and after the second time I tried to figure it out myself. Its seems pretty easy to do. The answer is actually included in the 'take a tour' guidance found when creating an invoice. Its pretty clearly included in the 'add a service' section. Please take a look through it if you could. If I'm right, you guys should be aware of it. If I'm wrong or missing something, which is certainly possible, please let me know.

thx!

@malo21 

You're spot on.  I'm not sure why @Kevin_C  and @ShiellaGraceA are telling you that you can't map an invoice item to a deferred revenue account.  All you need to do is set up item(s) mapped to a deferred revenue liability account and send it to your customer.  That debits A/R and credits deferred revenue.  Then, when the customer pays the invoice it debits your bank account and credits A/R.  At this point, you still have the credit balance in deferred revenue that you need to move to income.  After the marketing event, create a journal entry and debit deferred revenue and credit the appropriate income account and you're good to go.

I think everything you said above is a good workaround for the limitations in this area for QuickBooks. It gets you to the right answer under GAAP. The only problem I see is how do you efficiently track the different revenue streams if you have multiple revenue accounts (e.g. products and services)? When you record the JE to debit deferred revenue and credit revenue, you need to know which revenue accounts to credit and for how much. It seems to me that you'd need to track this outside of QuickBooks? I'm interested in ideas and suggestions, because this issue applies to my business. Thanks.

Thank you for writing this because I didn't want to have to write it all out but felt obligated to after I figure this out myself! This is exactly what I did and it seems to be working well. Nice to hear others finding similar solutions that are working. 

I work for a company that manufactures ladders for the navy primarily. The way the accountant here has them entering things is that they put in a sales order. If they get a prepayment, they do a journal entry to debit ar and credit deferred revenue. Then, when the item ships out they have them do an invoice and apply the payment to the invoice. This makes VERY messy reports and the owner is a stickler about his reports! Right now, he has me looking at why the deferred revenue account shows invoices, credit memos, payments and journal entries. Does anyone see a problem with the way they are doing this process? I just started with this company and so did this accounting firm; just before me so, we have no idea how it was previously done but the owner is not happy with this process. Please help! I love quickbooks because I hate Journal entries and this is way out of my league.

I know a better way to record the advance payment, heatherthebookkeeper.

You can create a liability account and record a retainer item. Here's how:

First, create a liability account:

1. From the Accounting tab, select Chart of accounts.
2. Select New.
3. From the Account Type dropdown menu, select Other Current Liabilities.
4. From the Detail Type dropdown menu, select Trust Accounts - Liabilities.
5. Enter a Name for the account.
6. Select an option from the When do you want to start tracking your finances from the is account in QuickBooks? dropdown list.
7. Click Save and Close.

Second, add a retainer item. I've added this article for the detailed steps: Record a retainer or deposit.

You can also browse this page on how you can run report for the sales: Run reports in QuickBooks Online.

I'm just around if you need help running reports.

That seems to be the better way to do it for sure! I am running it by the owner and accountant right now! Thank you!

You’re always welcome, @heatherthebookkeeper.

I’m glad to know that the information and guidelines outlined by my colleague give you a better option to record the advance payment in QuickBooks Online (QBO).

Rest assured, every concern raised on the Community page will receive the proper attention. Having said that, feel free to ask any other questions you may have regarding QuickBooks here.

I wish you success in your business. Enjoy your amazing day!

Just to clarify, I do not use QBO. I am using Enterprise 2022 but, I have been using QB since it first came out in the 90's so, I knew where to go by following the steps provided. 

If anyone else reading these steps needs to follow along in the desktop version I can offer these alternative steps:

Step 1 - From the Lists tab - select Lists, chart of accounts, new, account type=other current liabilities, name it (deposits; retainage, etc.), add a description if you choose, click save & close (mine is 2230 unearned income - deposits)

Step 2 - From the lists tab -select items, add new, service , name it (deposits/retainage, etc.), from the income drop down choose the account you set up in step 1

Step 4 - Option 1 - choose the customer, from new transactions choose sales receipt, for the item you choose the one you set up in step 2 (deposit/retainage), enter the dollar amount, save and close.

Step 5 - choose the customer, from new transactions choose create invoice, enter the items that were sold, on the last line of the invoice choose the item you set up in step 2 (deposit/retainage), enter the dollar amount as a negative, save and close.

Is there any way to get the customer sale to show up in sales reports if you are recognizing the revenue by month from the Deferred Income account?  I created a JE to recognize part of the income and entered the customer name.  It shows up correctly as far as the GL entry but if I try to look at Sales by month QB doesn't pick it up.  Any workarounds for this?  

Thanks for connecting with us here, @LALS3.

I'll gladly share some information with you. In QuickBooks Online (QBO), you can run the Transaction List by Customer report. This report will show you all sales, including deferred income that has been recognized, for each customer within the selected date range. Here's how: 

1. Go to the Reports menu and search the Transaction List by Customer report.
2. Under the Report period, click the dropdown arrow and customize the dates. 
3. Under the Rows/columns, click the dropdown arrow and select Month.
4. You can also click Customize in the upper right corner to get the specific details of the transactions.
5. Click Run report.

You may memorize this report to save its customized settings for easy access to use in the future.

You can also utilize this article to learn how to export your reports to Microsoft Excel from QBO: Export your reports to Excel from QuickBooks Online.

Know that the Community is always here to back you up. Have a great day ahead.

We can create items that initially mapped to Deferred Revenue.  

We can then create "zero dollar" invoices that recur automatically that basically book the revenue in the proper month and pull it out of Deferred Revenue.  By doing this as an invoice that is more internal, it then allows us to create sales reports by customer by month that tracks to actual revenue (Gaap).  

That is what we ended up doing.  Works perfectly.