Question

Deferred Revenue

Forum|Forum|4 years ago
March 29, 2022
16 replies
130 views

My company provides event-driven marketing services to companies. We invoice all the companies at the time of sale, but the marketing event occurs at a later date. Is there a way to 'map' the invoices so that when posted the debit goes to deferred revenue, rather than revenue? Right now I have to JE each invoice when entered, and then reverse each JE when the events occur and the revenue is earned..

(note: we do accrual accounting)

Thanks!

QuickBooks Online

S

ShiellaGraceA

Level 9

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.

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.

M

malo21Author

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

I

ipulverman

@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.

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