What is Revenue and Expense Deferral (RED)?
Revenue Deferral is considered a liability until it becomes relevant to the business at hand, such as a payment received for work that has not yet been performed. opposite of deferred charge. Expense Deferral refers to an item that will initially be recorded as an asset but is expected to become an expense over time and/or through the normal operation of the business.
Who can use this module?
Dynamics GP RED (Revenue and Expense Deferral) was designed for any company that needs to defer revenue or expense.
Let's say you're a media company with business in magazine publishing. You're offering your magazine subscription on a yearly, semi-annually or monthly (one-time) basis. When somebody subscribes to your magazine and pay a year subscription, you'll need to defer part of this subscription. At the end of the subscription period, you will have fulfilled your responsibility and the subscription will be fully realized as earned income.
How do I book a deferred entry from a Sales Invoice in Dynamics GP?
Once you have the sales invoice created, open the Distribution window select the account you want to defer then go to Extras>Additional>Deferral. Enter your Start and End dates, billing recognition account and choose your deferral method (Days Period, Equal Period and Miscellaneous).
Things to note when using this module:
- Deferred entries are always valued at functional currency
- You can only defer one invoice at a time
- Void Deferral Transactions can be utilize to void deferred entries only and have the original document like a Sales Invoice unvoided
There's room for improvement with this module including:
- Mass document deferral
- Audit-trail from a GL entry
- Multi-currency reporting based on originating document currency
To learn more about Revenue and Expense Deferral, you can visit RevenueRecognition.com