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Quickbooks Enterprise and deferred revenue. A bit confused and need help.

New CFO to a SaaS company and a bit confused about how to have my accountant process these transactions (we are currently using QuickBooks Enterprise).

Would some kind soul who uses Quickbooks in a SaaS or other deferred revenue environment, list out the Quickbooks entries for deferred revenue from the initial invoice (annual invoice?) to the recognition of revenue by month. No need for each month but just assume an invoice is sent out in December 1, $120,000 payment due January 1 and then initial revenue recognition for the January payment ($10,000 for 12 months).

Any help would be greatly appreciated.

Thank you.

Answers

Shana Wild
Title: Controller Consultant
Company: Tier One Services, LLC
(Controller Consultant, Tier One Services, LLC) |

Hello - You might consider the following entries:

At the time of invoicing -
DR Accounts Receivable $120,000
CR Deferred Revenue $120,000

When the service is provided (revenue recognition)-
DR Deferred Revenue $10,000
CR Revenue (standard revenue account) $10,000

When cash is received you would relieve the AR account.

If I can help further please let me know.

Shana Wild
Title: Controller Consultant
Company: Tier One Services, LLC
(Controller Consultant, Tier One Services, LLC) |

Hello! Just reaching out to see if the information was helpful and if you have any additional questions?

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