Deferred Revenues (Recognition) in Odoo 13 Accounting, Deferred revenue is an advance payment received by a company. It is not yet revenues so cannot be reported on the income statement. In other words, deferred revenue is a payment in advance recorded on the receipt’s balance sheet as a liability account until either the services have been rendered or the products have been delivered or we can say, Payments made in advance by customers for products yet to deliver or services yet to render.
For example, if you want to sell a 1-year service contract for Rs 48,000 that begins next month and is of a duration consisting of 12 months period. Once you validate the invoice, Rs 48,000 should be posted into a deferred revenue account, because the amount is what you received, and not yet been earned. And, over the next 12 months, you will be reducing the deferred revenues account by 4,000 rupees (48,000/12) on a monthly basis and recognizing the amount as revenue.
Deferred Revenue can be automatically created from a customer invoice. All you need to do is to set a deferred revenue type on your customer invoice line. When the user will validate the invoice, deferred revenue will automatically be created, using the information of the customer invoice.
Once the customer invoice is validated, Odoo will automatically create a deferred revenue for you, and the related journal entry.
What does “Prorata Temporis” mean?
The Prorata Temporis feature is useful to recognize your revenue the most accurately possible.
With this feature, the first entry on the Revenue Board is computed based on the time left between the Prorata Date and the First Recognition Date rather than the default amount of time between recognitions.
For example, the Revenue Board above has its first revenue with an amount of $ 4.22 rather than $ 70.00. Consequently, the last entry is also lower and has an amount of $ 65.78.
And we can modify an existing revenue
Click on Modify Revenue
Change the number of revenue
Odoo will automatically recompute a new revenue board.
To know more about the use of analytic account check the blog:
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