Definition of Deffered Income
This feature license allows for the recognition of deferred income.
Deferred income is income recognized before the corresponding services have been provided. The income is thus neutralized and the margin realized is deferred to the next accounting period.
Example: when a service is invoiced but not performed at the end of the year or a good is invoiced but not delivered, a deferred revenue should be recorded.
How it works
In your Frisbii application, the Enable Periodic Distributions option can be activated from the Corporate name object, in the Accounting section. This option triggers the automatic generation of periodic distribution records on the invoice line items.
These records allow you to distribute the amounts of the invoice lines month by month.
Frisbii report
The Periodic Distribution record is generated automatically when an Invoice Line Item record is created.
As a result, reporting on the Invoice Line and Periodic Allocation records then provides the total or detailed amount of deferred revenue to be allocated to each accounting period.
Understanding the fields
The calculation of the periodic distribution is based on a 360-day year and the generation of the records is conditioned by the fields:
Invoicing Period Start Date
Invoicing Period End Date
On periodic distribution objet
The Number of units over period field defaults to the number of days in the month and is automatically calculated on each periodic distribution record.
You can change the value of the Number of units over period by deleting the value from the Start or End field.
On the invoice line item object
The Total units over period field is used to calculate a ratio on each periodic distribution record and thus to break down the amounts of the invoice line in the Amount excl.
The Do not distribute checkbox allows you to split or not an invoice line item over the billing period. This specific line item won't be distributed.
This field is also present on the Subscription line item record.
It can be checked on the record of the latter and followed on the record of the invoice line item.
Well done! You know now how periodic distributions work.