How to set up and use Deferral in Business Central

Alexandra Horbatenko

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To recognize a revenue or an expense in a period other than the period in which the transaction was posted, standard Microsoft Dynamics 365 Business Central functionality can be used to automatically defer revenue and expenses over a specified schedule.

Let's take a look at one of business scenarios when Unearned Revenue is deferred over 12 months.

1. Create a new Deferral Card: navigate to Deferral Templates and select New+ from the toolbar.

2. In the new Deferral Template, enter a Code and Description. Select the relevant Balance Sheet G/L Account under Deferral Account. Enter the number of periods for the amount to be deferred across and add a Period Description. Note that placeholder codes can be included in this description to automate the insert:

%1 = The day number of the period posting date

%2 = The week number of the period posting date

%3 = The month number of the period posting date

%4 = The month name of the period posting date

%5 = The accounting period name of the period posting date

%6 = The fiscal year of the period posting date

3. On a newly created Sales Invoice, select a relevant Income Statement G/L Account and define Deferral Code. If Deferral Code column is not available on your interface, please use Personalize to bring it in.

4. Please go to More options - Line- Related Information- Deferral Schedule to view the deferred period amounts to be posted.

4. From here, you can change the Start Date and recalculate amounts accordingly by clicking Calculate Schedule.

IMPORTANT: If the deferral entries span past the current financial year, make sure the year(s) needed have been created in Accounting Periods, otherwise the entry will not be saved.