See this video for a quick overview of how the deferred revenue journal works:

The deferred revenue journal is found on the Journals tab (top bar), Step 3 of Revenue Recognition.

From there, you can post to Xero or QuickBooks.

Understanding the journal calculations

See this article for details on how the deferred revenue journal is calculated and an explanation of each section on the deferred revenue journal page.

Setting up your journal for the first time

Set your balance sheet account(s)

The first time you select this report, the system will ask you to select your default balance sheet account for deferred revenue.  Select your account (current liability) and Continue.

If you invoice to the balance sheet or use more than one balance sheet account, use the Mapping button on the main journal page to tell ScaleXP which balance sheet account is associated with which P&L account.

Use the drop down menus to map. You can adjust these at any time using "Mapping."

• If you invoice to the balance sheet, you must choose just one P&L account for each balance sheet account. You must repeat each combination:
  • P&L Revenue Account >> Balance Sheet Deferred Revenue Account and
  • Balance Sheet Deferred Revenue Account >> P&L Revenue Account
• If you invoice to the P&L, you must choose just one balance sheet account for each P&L account.

IMPORTANT - If you invoice to the balance sheet, you must enter each combination twice -- once pointing from the balance sheet to the P&L account and again pointing from the P&L to the balance sheet account. This is because otherwise, when recognising revenue, the journal will use the default balance sheet account instead of the correct one for the P&L code.

Add Tracking Codes or Classes, if desired

If you wish to include Xero Tracking Codes or QuickBooks Classes in your journals, see this article.

Select IFRS / GAAP or Revenue Recognition for back-dated revenue

How to set journals to IFRS or GAAP revenue recognition rules so that backdated revenue is recognised at time of invoice 

Setting your account filters

Set "Filter accounts by" to include all relevant revenue and balance sheet accounts for the journal.  Set the report beginning and end date.   Be sure to Save Changes in order to ensure the correct filters are activated.

By default, the Deferred Revenue Journal will include all accounts which have invoices coded to them in your accounting system. Once you select an account, the filter will reduce to just include the selected accounts.

It is very important to set your deferred revenue journal to include only those P&L and balance sheet accounts you want included in the deferred revenue journal and exclude any balance sheet accounts used for accruals.

Be sure you are happy with ScaleXP revenue recognition amounts for all deferred revenue accounts before proceeding to post the journals.

Documenting your journal

To download the page, use the icon at the top right. Choose from 3 options.

Use the download button or the "post journal" button to"Download Journal Detail" This will provide detail of the calculations shown on the deferred revenue journal report as well as invoice line level detail behind the following:

• invoices issued in the month
• revenue recognised for the month
• deferred revenue on the balance sheet at the end of the month

Read more about download options here.

Posting your journal

Use the "post journal" button at the top of Section 1.

If you are posting to a period that is locked in your accounting system, ScaleXP will automatically suggest posting the journal to the next available open period instead.

• In QuickBooks, this will post a journal.
• In Xero, this will post a draft journal which you need to approve.
• Once posted, sync with ScaleXP to see the impact. The recommended journal will reduce to nil.

Don't forget to attach a download documenting the detail behind your journal.

Before posting, you will need to ensure that you are happy with the recommendations based on alignment with your expected revenue and balance sheet positions.

See this article for details on how the deferred revenue journal is calculated and an explanation of each section on the deferred revenue journal page.

Customers tab: where to configure and review revenue and customer information, MRR, ARR    

To adjust revenue or the balance sheet, see this article.

Reviewing or changing your settings

View your deferred revenue journal settings at any time by using the cog symbol at the top right of the deferred revenue journal page.