Skip to content
Open appSchedule a pilot

Deferred Revenue

Deferred Revenue handles invoices that bill for work you have not finished yet, such as an annual subscription paid up front. You choose the invoice, set how long it takes to earn, and DayZero holds the amount as a liability and releases it to revenue period by period.

Key capabilities

  • Defer an invoice: reclassify all or part of a finalized invoice's revenue (excluding sales tax) into the Deferred Revenue liability
  • Choose a Straight line schedule (filled in for you) or a Custom one where you enter each period's number
  • Pick the unit that drives the schedule: Months, Hours or Custom (licences, milestones, seats)
  • Three views: Schedules, Matrix and Recognized
  • Summary tiles: Deferred to date, Recognized and Still deferred
  • Post due entries to recognize every period whose date has arrived
  • Terms to re-cut the unposted part of a schedule, and Undefer to release the balance back to revenue

How it works

Deferring does not change the invoice or what the customer owes. It only moves revenue on your books from income into a liability, then back out in slices.

flowchart LR
  inv["Finalized invoice"] --> defer["Defer revenue"]
  defer --> liab["Deferred Revenue liability"]
  liab --> sched["Schedule by period"]
  sched --> rev["Revenue recognized"]

Nothing for a future period is posted up front. Each period posts on its date, and Post due entries catches up any that are due right now.

How to use it

  1. Open Deferred Revenue and click Defer an invoice..., or open a finalized invoice and click Defer Revenue.
  2. Pick the invoice. Draft, void and uncollectible invoices are not eligible.
  3. Enter the Amount to defer (it cannot exceed the invoice's revenue before sales tax), the Denominator unit, the number of Recognition periods (months) and the First recognition period.
  4. For Hours or Custom units, enter the Total to burn down. Choose Straight line or Custom, check the schedule preview, and click Defer revenue.
  5. On the Schedules tab, expand an invoice to see each period's date, amount and status (Scheduled, Not scheduled or recognized).
  6. For a Custom schedule, type each period's number and click Save. The period is priced and can post once it has a number.
  7. Click Post due entries to review how many periods and how much revenue will post, then confirm.
  8. Use the Matrix tab for invoices down the side and months across the top, or Recognized for posted and upcoming revenue by month.

Pro tips

  • Use the Defer revenue checkbox on invoice lines. When you defer that invoice later, the amount is pre-filled with the sum of those lines.
  • Filter the Schedules and Matrix tabs by Active, Completed or Cancelled to review finished work or removed deferrals.
  • Pick Straight line for ordinary subscriptions. Choose Custom when recognition follows milestones or delivery you only know later.
  • The Matrix footer shows monthly totals and the amount Still deferred by customer, a quick tie-out to the balance sheet at close.
  • In Recognized, choose a From and To date and filter by method to isolate subscriptions from hours-based work.
  • You can only defer an invoice once. Open Terms on the existing schedule instead.

In-depth guide

This page vs contract schedules

This page is for individual invoices you choose to defer. Revenue Schedules covers deferred revenue that comes from Customer Contracts, where schedules and prepaid hours follow the contract automatically.

Deferred Revenue (this page) Contract schedules
Starts from An invoice you pick A contract and its billing lines
Created by You, with Defer an invoice... The contract's billing rules
Where you manage it Schedules and Terms here The contract's Deferred schedule tab

The Recognized tab shows both, grouped by period, method and source, with a Method filter such as Straight line, Point in time and Hours (burndown). The first two tabs list invoice deferrals only.

Editing and undoing

  • Terms changes the unit, period count, total, start month or notes. Only the unposted part is re-cut. Periods that already posted keep their entries, and the period count must stay above the number already posted.
  • Undefer releases whatever is still in Deferred Revenue back to revenue today. Past entries are kept.
  • A schedule becomes Completed when its full amount is recognized.

Good to know

  • Custom periods show "Awaiting number" under Posts on until you enter a number, and nothing posts for them before then.
  • A period's units cannot exceed the schedule's total, and a period that already posted cannot be changed.
  • Start dates snap to the first of the month.