Revenue Recognition: Automate Deferred Revenue Tracking and Journal Entries

The Revenue Recognition module helps you track deferred revenue, automate recognition schedules, generate journal entries, and report on your contracts over time. Whether you bill annually for a subscription or recognize revenue as milestones are met, this tool turns complex schedules into automated double-entry postings.

This guide walks through every screen, button, and field in the order you see them on screen.

---

Getting Here

1. Open the main sidebar and select a Bookkeeping Client.
2. In the client sidebar, expand the Revenue Recognition section.

Two menu items appear:

Click Dashboard to begin.

---

Understanding the Dashboard

The Dashboard is your starting point. It shows every revenue recognition schedule for the client, plus summary statistics and quick actions.

Top Metrics

Six cards sit across the top of the page. They give you a snapshot of your deferred revenue position:

Header Buttons

Above the metrics, two buttons sit at the top-right:

• Process Due Entries — Runs recognition for all entries whose recognition date has arrived. Click this to bulk-process everything that is currently due.
• Create Schedule — Opens the form to set up a new revenue recognition schedule.

Filters

Below the metrics, a filter bar lets you narrow down the schedules list:

Select a filter and the table updates immediately.

The Schedules Table

Below the filters, a table lists every schedule. Each row shows:

Click the eye icon to open the schedule detail page. Click the pencil icon to edit the schedule. Click the trash icon to delete it — a browser confirmation prompt appears before deletion.

If no schedules exist yet, an empty state appears with a message and a Create Your First Schedule button.

---

Creating a Revenue Recognition Schedule

1. Click the Create Schedule button at the top-right.
2. A dialog opens with all the fields you need.

Schedule Form Fields

Fill in the form from top to bottom:

Recognition Methods

3. Click Create Schedule at the bottom of the dialog.

The schedule appears in the table. The system automatically generates recognition entries — one for each period in the schedule — and marks them as pending or scheduled.

✓ Tip: Set up your Settings first (next section) so every new schedule inherits your preferred defaults for method, frequency, and GL accounts.

---

Editing a Schedule

1. In the schedules table, click the pencil icon on the row you want to change.
2. The same form opens with all fields pre-filled.
3. Make your changes.
4. Click Update Schedule.

⚠ Warning: Changing the Total Amount, Start Date, End Date, Recognition Method, or Recognition Frequency after entries have been generated may require re-generating the entries. Existing processed entries are not automatically reversed.

---

Viewing a Schedule in Detail

Click the eye icon on any schedule row to open its full detail page.

Overview Cards

Four cards across the top summarize the schedule's financial position:

Schedule Details Card

A grid shows the schedule's configuration at a glance:

Recognition Entries Table

This is where you manage individual recognition periods. Each row represents one period in the schedule:

Entry Actions

• Process — Appears on entries with status Pending or Scheduled. Click it to create the journal entry that moves the period's amount from Deferred Revenue (liability) to Revenue (income).
• Approve — Appears when the settings require approval and the entry has not yet been approved. Click it to mark the entry as approved before processing.

Process entries one at a time from this page, or use the Process Due Entries button on the Dashboard to process all due entries at once.

Entry Status Flow

flowchart LR
    Pending -->|Schedule created| Scheduled
    Scheduled -->|Date arrived| Pending2[Pending]
    Pending2 -->|"Approve (if required)"| Ready
    Ready -->|Process| Recognized
    Recognized -->|Reverse| Reversed
    Pending2 -->|Skip| Skipped

✓ Tip: If you have Auto-Create Journal Entries enabled in Settings, the Process step happens automatically when you click Process — no manual journal entry is needed.

---

Configuring Revenue Recognition Settings

Click Settings in the Revenue Recognition sidebar menu to open the configuration page.

Configuration Status Banner

If neither the Deferred Revenue Account nor the Revenue Account has been set, a yellow warning banner appears at the top:

⚠ Settings Not Configured: Please configure both Deferred Revenue Account and Revenue Account to enable automated revenue recognition.

Once both accounts are selected, the banner disappears.

General Ledger Accounts

Two dropdowns let you pick the default GL accounts:

The dropdowns show only active accounts from the chart of accounts that match the appropriate type (liability accounts for deferred, revenue accounts for recognized). Each option shows the account number and name.

You can leave either as None — but schedules cannot be processed without them. You can also override these accounts on individual schedules.

Recognition Defaults

These settings are applied as pre-selected values when you create a new schedule. You can always change them per schedule.

Automation Settings

Control how and when entries are created and processed:

Notification Settings

Saving Settings

Click the Save Settings button at the top-right of the page. A toast message confirms the save.

---

Processing Due Entries

You can process recognition entries two ways:

Bulk Processing (from the Dashboard)

1. On the Dashboard, click the Process Due Entries button.
2. The system finds all entries whose recognition date is today or earlier and whose status is Pending or Scheduled.
3. For each entry, if Auto-Create Journal Entries is on, a journal entry is created automatically debiting the deferred revenue account and crediting the revenue account.
4. A toast message shows how many entries were processed.

Individual Processing (from the Detail Page)

1. Open a schedule's detail page.
2. Find the entry you want to process.
3. If Require Approval is on and the entry is not yet approved, click the Approve button first.
4. Click the Process button.
5. A toast confirms the entry was processed.

---

The Revenue Recognition Report

The report gives you a consolidated view of all schedules across a date range. To open it:

1. From the client sidebar, go to Reports.
2. Click Revenue Recognition Report.

Report Filters

At the top of the report page, a filter card lets you control the data:

Click Apply Filters to refresh the report with your chosen range.

A Refresh button at the top-right reloads the data at any time.

Summary Cards

Four cards summarize the filtered data:

Recognition Schedules Table

A full-width table lists every schedule matching your filters:

A footer row shows totals for Total Amount, Recognized, and Deferred across all schedules.

Recognition by Period (Waterfall)

If there is recognition data in the selected date range, a second table appears showing recognized amounts grouped by month:

A footer row shows the grand total across all periods.

If no schedules match the filters, an empty state appears with a No Schedules Found message and suggestion text.

---

Schedule Statuses Reference

---

Entry Statuses Reference

---

Frequently Asked Questions

What is the difference between Straight-Line and Pro-rata?

Straight-Line divides the total amount equally by the number of periods. For example, a $12,000 annual contract recognized monthly gives $1,000 per month. Pro-rata allocates based on the actual number of days in each period, so months with 31 days get slightly more than months with 28 days.

Do I need to configure settings before creating schedules?

No, but it saves time. If you configure the default accounts, method, and frequency in Settings, every new schedule form will be pre-filled with your preferences. You can still override them per schedule.

What happens when I click Process Due Entries?

The system finds all entries whose recognition date is on or before today and whose status is Pending or Scheduled. For each one, if Auto-Create Journal Entries is on, it posts a journal entry: debit Deferred Revenue (liability) and credit Revenue (income). Processed entries move to Recognized status.

Can I override the GL accounts on a single schedule?

Yes. When creating or editing a schedule, use the Deferred Revenue Account (Override) and Revenue Account (Override) dropdowns. Leave them as "Use Default" to inherit the Settings values, or pick a specific account for that schedule.

What happens if I delete a schedule with processed entries?

The schedule is soft-deleted. Any journal entries that were already posted are not automatically reversed — you would need to reverse them manually through the journal entry system.

How do I pause a schedule?

Edit the schedule and change its status. Note that the current UI manages status through the edit dialog. Paused schedules stop generating new due entries until resumed.

Can I have multiple schedules for the same customer?

Yes. You can create as many schedules as you need for a single customer — for example, separate schedules for different contracts, products, or service lines.

How do I handle a contract that spans partial periods?

Use the Pro-rata recognition method. It calculates each period's amount based on the actual number of days, so partial first or last periods are handled correctly.