Partial Revenue Recognition

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Posted on by Mubashir Hussain

I want to Partially recognize revenue from sale invoice. Is it possible doing like this in BC.

The Accounting look like this.

Accounting Debit Credit
Accounts Receivable 50,000
Deferred Revenue 5,000
Revenue 45,000

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DAnny3211 9,272 Super User 2024 Season 1 on at

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Partial Revenue Recognition

hi

it is possible to partially recognize revenue from a sales invoice in Business Central using deferral templates. First, create a deferral template and define the calculation method and periods. Then, assign the deferral template to the sales line. When you post the invoice, Business Central will automatically defer the revenue according to the template. For example, for an invoice of 50,000 with 5,000 deferred revenue and 45,000 recognized revenue, the accounting entries will be: Debit: Accounts Receivable 50,000, Credit: Deferred Revenue 5,000, Credit: Revenue 45,000.

https://learn.microsoft.com/en-us/dynamics365/business-central/finance-how-defer-revenue-expenses

Regards
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Yi Yong 1,450 Super User 2024 Season 2 on at

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Partial Revenue Recognition

Hello,

Unfortunately, 'Allocation Account' is not one of the options in the Job Planning Lines.

You will have to customize this.
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Mubashir Hussain 31 on at

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Partial Revenue Recognition

Thanks, yi yong. its really helpful, one final question. how I can associate this with job planning line. or what if I create the sale invoice from job planning line?

thanks, Appreciated.
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Yi Yong 1,450 Super User 2024 Season 2 on at

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Partial Revenue Recognition

Hello,

Understood, the deferral function will immediately post the 'deferred' amount on the subsequent dates based on the schedule.

If you are okay with manual reversal then I suggest to look into the Allocation Account.

https://learn.microsoft.com/en-us/dynamics365/business-central/finance-allocate-revenue-costs

Below is my testing:

* Assuming it is always 10% of the total sales.

* Use 'Allocation Account' type

* System will post accordingly to the ratio
Mubashir Hussain 31 on at

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Partial Revenue Recognition

Hi Yi Yong

Here in the screen shot attached.

When I Post sale invoice with this deferral code. It deferred the revenue for 5,000 but System nullified the Deferred Revenue Account 2318 by putting the reversal entry in the deferring date. I don't want to nullify the deferral account; the value should retain in the accounts and in future I should manually put the reversal of it.
Yi Yong 1,450 Super User 2024 Season 2 on at

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Partial Revenue Recognition

Hello,

Would you mind showing how the deferrals template was setup?
Mubashir Hussain 31 on at

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Once I post the sale invoice it makes my Deferred revenue account zero. I want to retain this 5000 in the in the deferred revenue Account. which step I am missing.
gdrenteria 12,290 Most Valuable Professional on at

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Hi

Adding some more information. I hope it helps you.

Sales Deferral in Dynamics 365 Business Central | Armanino

Create Deferrals from Sales and Purchases - Dynamics 365 Business Central (usedynamics.com)

How to manage deferrals (vendor prepayments) within Microsoft Dynamics 365 Business Central (kristenhosman.com)

Best

GR
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Yi Yong 1,450 Super User 2024 Season 2 on at

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Partial Revenue Recognition

Hello,

There is a standard deferral function in BC.

Defer revenues and expenses - Business Central | Microsoft Learn