Revenue recognition schedules

Bill once, recognise over time. The invoice credits deferred revenue and releases it month by month.

Accounting → Revenue recognition.

When you bill a year of service up front, you have the cash but you have not earned the revenue. A recognition schedule handles that correctly.

How it works: put a recognition period on an invoice line. Instead of crediting income, the line credits Deferred Revenue — a liability, because you owe the customer service. Each period, the recognition run moves one period's share from Deferred Revenue to income.

Methods: straight line over the term, or by a milestone schedule you set.

What you can see: the deferred revenue roll-forward — opening balance, additions from new billings, releases to income, closing balance — which is the schedule an auditor will ask for.

The mirror image on the expense side is Prepaid expense amortization.