Deferred Revenue/Expense Report
Applying Deferred Accounting to sales or purchase invoices in ERPNext causes the income or expense to be postponed for a predetermined amount of time rather than being recognised right away. It can be challenging to determine the difference between actual and future revenue or expenses, especially when there are several deferred items.
This is made simpler by ERPNext’s Deferred Revenue/Expense Report in two ways:
- Recognized (actual) revenue/expense entered into the General Ledger.
- Next (anticipated) postings that will be noted within the allotted time frame.
1. Purpose of the Expense Report
- Keep track of the amount of Deferred Revenue that has been declared as income.
- Keep track of the amount of Deferred Expense that has been reported as an expense.
- For outstanding deferred amounts, refer to future postings.
- Get information at the Item and Invoice levels.
2. Report Structure
2.1 Deferred Revenue
Regarding sales invoices that include deferred items:
- Denotes the portion of revenue that has already been recognised.
- Indicates the future months or dates that the remaining revenue must be recognised. Perfect for software licenses, subscription services, or any kind of upfront billing.
2.2 Deferred Expense
Regarding purchase invoices that include deferred items:
- Denotes the portion of the Expense that has already been recognized.
Convenient for prepaid expenses like insurance, rent, or subscriptions, it shows the months or dates in the future when the remaining balance is due.
