QAD 2017 Enterprise Edition
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Managing Deferred and Accrued Revenue
Managing Deferred and Accrued Revenue
When you create a contract, you indicate what type of revenue recognition you want to use. The default value for new contracts is set in the Revenue Type field in SSM Accounting Control.
You can choose one of three ways of recognizing revenue:
Cash Basis: In cash-basis accounting, revenue is recorded in the period it is actually received.
Accrued: In accrual basis accounting, revenue is recorded in an Accrued Revenue account in the period in which it is earned, even though cash is not received in that period. To use this revenue type, Bill Arrears must be Yes. When you invoice at the end of service coverage, this lets you post accrued amounts during the duration of the contract.
Deferred: In deferred accounting, collected revenue is held in a deferred account and is posted periodically over the contract duration. To use this revenue type, Bill Arrears must be No. You invoice at the beginning of the contract coverage and perform your normal invoicing procedure. Total revenue is posted to a Deferred Revenue account and moved periodically over the duration of the contract.
Note: General revenue, as well as discount and additional charges revenue, are accrued or deferred; revenue from taxes is not.