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Guide to Deferred Revenue

This document provides a comprehensive guide on Deferred Revenue, including its definition, calculation methods, and forecasting techniques. It outlines how Deferred Revenue is recognized on financial statements and offers practical templates for managing it. The author, Josh Aharonoff, encourages readers to utilize a free deferred revenue template available at the end of the guide.

Uploaded by

hesham zaki
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© © All Rights Reserved
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25 views

Guide to Deferred Revenue

This document provides a comprehensive guide on Deferred Revenue, including its definition, calculation methods, and forecasting techniques. It outlines how Deferred Revenue is recognized on financial statements and offers practical templates for managing it. The author, Josh Aharonoff, encourages readers to utilize a free deferred revenue template available at the end of the guide.

Uploaded by

hesham zaki
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 21

Revenue Jan 22 Feb 22

$12,000 $1,000 $1,000


b 22 Mar 22 Apr 22 May 2
000 Deferred
$1,000 $1,00
0 $1,000
Revenue
Apr 22 Ma
y 22 Jun 22
Jul 2
1,000 $1,000 $1,00
0
Josh Aharonoff $1,00

Swipe

1
About
this guide

In this guide

You will learn what Deferred


Revenue is, how to calculate
it, and how to forecast it

Stick around to the end for my


FREE deferred revenue template

Josh Aharonoff

Deferred Revenue 2
Contents

1 What is Deferred 4
Revenue?

2 How is Deferred 7
Revenue Calculated?

3 How to Forecast 12
Deferred Revenue

4 Bonus: Deferred 18
Revenue Template

Josh Aharonoff

Deferred Revenue 3
1

What is
Deferred
Revenue?
Josh Aharonoff Swipe

4
Deferred Revenue is

the $$ amount
of goods or services that
you currently owe to your
customers

$1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

$12,000

Client You

Josh Aharonoff

Deferred Revenue - What is Deferred Revenue? 5


This can arise
when:
An invoice is sent

Revenue Jan 22 Feb 22 Mar 22 Apr 22 May 2

$12,000 $1,000 $1,000 $1,000 $1,000 $1,000

Cash is collected

Revenue

$12,000

Josh Aharonoff

Deferred Revenue - What is Deferred Revenue? 6


2

How is
Deferred Revenue
calculated?

Josh Aharonoff Swipe

7
Deferred Revenue goes on your

Balance Sheet,
and is a liability
(it’s a liability, since you owe something)

Josh Aharonoff

Deferred Revenue - How is Deferred Revenue calculated? 8


Revenue goes on your

Income
Statement

Josh Aharonoff

Deferred Revenue - How is Deferred Revenue calculated? 9


Calculate
Deferred Revenue
Option 1 : invoice is sent

eferred Revenue
Beginning D

Invoices Sent

enue Recognized
Rev

ferred Revenue
End De

WHEN INVOICE IS SENT EACH MONTH

DR Accounts $12,000 DR Deferred $1,000


Receivable Revenue
CR Deferred $12,000 CR Revenue $1,000
Revenue

Josh Aharonoff

Deferred Revenue - How is Deferred Revenue calculated? 10


Option 2 : Cash is collected

eferred Revenue
Beginning D

Money Collected

enue Recognized
Rev

ferred Revenue
End De

WHEN CASH IS COLLECTED


DR Cash $12,000
CR Deferred Revenue $12,000

EACH MONTH
DR Deferred $1,000
Revenue
CR Revenue $1,000
Josh Aharonoff

Deferred Revenue - How is Deferred Revenue calculated? 11


3

How to Forecast
Deferred Revenue

Josh Aharonoff Swipe

12
Daily

Monthly

Josh Aharonoff

Deferred Revenue - How to Forecast Deferred Revenue 13


Start by entering in the
Contract Details

Josh Aharonoff

Deferred Revenue - How to Forecast Deferred Revenue 14


OPTION 1

Calculate daily

Add a new
column for Days

Josh Aharonoff

Deferred Revenue - How to Forecast Deferred Revenue 15


OPTION 1

Calculate daily

Calculate the earned


revenue based off of
the days allotted in
the month

See bonus at the end of this


guide for this template!

Josh Aharonoff

Deferred Revenue - How to Forecast Deferred Revenue 16


OPTION 2

Calculate monthly

Calculate Revenue evenly


by month
Annual Sale - evenly over 12 months
Quarterly Sale - evenly over 3 months

See bonus at the end of this


guide for this template!

Josh Aharonoff

Deferred Revenue - How to Forecast Deferred Revenue 17


4

Bonus: Try my
Deferred Revenue
Template

Josh Aharonoff Swipe

18
Download FREE
deferred template

https://www.mightydigits.com/startup-deferred-revenue

Josh Aharonoff

Deferred Revenue - Bonus: Try my Deferred Revenue Template 19


Thanks for
reading!
Did you enjoy this content?
Do you have anything to add?
Questions?

20
Author

Josh
Aharonoff

I help startups Scale their Finance &


Accounting with amazing reporting
& financial operations

Find out why over 40 startups


trust me each month:

https://www.mightydigits.com/book-meeting

+ Follow me on Linkedin for more Startup Finance & Accounting tips

Josh Aharonoff

Deferred Revenue 21

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