Deferral Function

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Posted on by LeRig

Hi,

Can we imbed the deferral function after we have posted a sales invoice?

We raise a sales invoice but the income cannot be recognized until a future period in time. Once this future starting point is determined, the income needs to be allocated across 3-4 years on a monthly basis. Further to this, if we needed to recognise income earlier, are we able to edit the deferral function or make adjustments to fully recognise the income in say, month 30 rather than month 36?

Does anyone know if this is possible or if there is a workaround for this?

Thanks

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Dirk on at

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Hi,

I am not aware that this possible somehow automatically.

Would it be an option to post the sales invoice to a certain account and then handle the "distribution" of the revenue in recurring journals, with a specified ending date?

There would be no automatic calculation of the amounts per month. But the ending date can be changed later, if needed.

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Community Member on at

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Hello,

Have you tried using the Deferral functionality? You can create a Deferral Template based on the Deferred situation. On the Sales Invoice line, you show Deferral Code and enter this value on the Sales Line. NAV, after posting will take the amount and create a deferred revenue entry and book only the earned deferral for the period. Deferrals feature allows users to automate the process of deferring revenues and expenses over a pre-defined schedule. It’s actually very easy to use. All you have to do is enter a value in the Deferral Code field on either the Sales Line, Purchase Line, or General Journal Line. This value will map to a deferral schedule that you have set up previously and will act as a template for how the amounts will be deferred. That means you can edit the dates and amounts of the deferral schedule after it has been applied to the line (not posted, of course).

Deferral Schedule.

Normally, when you post an order, you would see a debit to the Receivables Account and a credit to the Sales Account. With a deferral, that changes a little bit. Instead of a credit to the Sales Account, you will see a credit to the Deferral Account specified on the Deferral Template. Then you will see a series of debits to that same account and credits to the Sales Account based on the deferral schedule posting dates and amounts. One thing you’ll need to consider is the allowed posting date ranges for the users in your company. Many times, these dates are limited to a specific month, but when posting a deferral, the dates will need to be opened up. For example, if you are deferring revenue over the course of a year, you will need to be able to post to any date in that year.

Hope this helps.

Thanks,

Steve

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LeRig 45 on at

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Thanks so much Steve, much appreciated

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