Deferred Revenue


K

Kevin

I am considering Accounting 2009. Our business requires customers to prepay
for service. We invoice our customers for one year of service, they prepay
for the year and revenue is accrued monthly.

Can Microsoft Accounting handle this naturally (in an automated fashion)?
If it can, could someone advise me of the general procedures? I want to
examine how it shows against invoice, customer, accounts, on balance sheet
and net income statement.

I am comfortable with the fundamental accounting transactions, but no sure
how Office Accounting 2009 handles this or makes it work well.
 
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T

tedh2997

Dear Kevin,
If you have your answer, great! Below is an excerpt from Microsoft on
handling customer who might prepay.
Cheers!
Ted

{Excerpt}
You might receive a customer payment before it is earned and before you have
sent an invoice, possibly even before you receive the order. When you create
an invoice related to the prepayment, you can apply the payment against it.
To handle a customer prepayment, do the following:
1. Receive the payment without applying it to an invoice.
2. Create an invoice for the order.
3. On the Customers menu, click Receive Payment.
4. On the Customer Payment form, select the Apply check box (by default, the
first column in the table) for the invoice that you want to apply to
prepayment against.
5. In the line for the selected invoice, click Applied Credits.
6. In the Apply Credits and Payments dialog box, select the check box next
to the prepayment.
7. If the amount in the Credit Amount field is greater than the amount that
you want to apply, change the amount in the Amount to Use column.
8. To close the Apply Credits and Payments dialog box and apply the payment,
click Adjust.
9. You can do one of the following:
 Print the invoice or send it to the customer in an e-mail message. The
invoice reflects the prepayment applied to the total amount.
 Print a customer statement that shows the payment applied to the invoice,
and mail it or send it to the customer in an e-mail message.
 

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