Revenue Recognization

Invoice in Advances
Invoice in Advances

We have 2 Invoicing Rules

One is Invoice in Advance, It is nothing but recording the
income whenever it gets paid rather than it is Occured.

It happens mostly in Contracts/Projects.

we have to do the below setups

• Give Revenue Recognization accounts at Auto Acc Level

Unbilled Receivables

Unearned Revenue

• Create Revenue Schedule

Fixed Schedule Variable Schedule

Accounting Treatment
Let’s assume like we are in SEPTEMBER period and create a 4 month fixed Revenue Schedule for a 10,000/-
Invoice the accounting treatment would be like below

September
Receivables A/c Dr 10,000
To Revenue A/c 2500
To Unearned Rev A/c 7500
October Ultimate entry remains @ end of Contract/Project is
Unearned Rev A/c Dr 2500 Receivables A/c Dr 10,000

To Revenue A/c 2500 To Revenue A/c 10,000

November
Unearned Rev A/c Dr 2500
To Revenue A/c 2500
December
Unearned Rev A/c Dr 2500
To Revenue A/c 2500
Revenue Recognization

Invoice in Arrears
Invoice in Arrears

We have 2 Invoicing Rules

One is Invoice in Arrears, It is nothing but recording the
income whenever it is occured rather than it gets Paid.

It happens mostly in Contracts/Projects.

Accounting Treatment
Let’s assume like we are in SEPTEMBER period and create a 4 month fixed Revenue Schedule for a 10,000/-
Invoice the accounting treatment would be like below

September
Ubilled Receivables A/c Dr 2500
To Revenue A/c 2500
October
Ubilled Receivables A/c Dr 2500
To Revenue A/c 2500
November
Ubilled Receivables A/c Dr 2500
To Revenue A/c 2500
December
Receivables A/c Dr 10,000
To Revenue A/c 2500
To Ubilled Receivables A/c 7500