This article explains how ScaleXP calculates the suggested posting amount shown in the deferred revenue journal, so you can understand each section of the report, check the numbers against your accounting system, and post the journal to Xero or QuickBooks with confidence.
See this video for an overview:
The deferred revenue journal is found on the Journals tab (top bar), Step 3 of Revenue Recognition.
Read more about setting this up in How to set up the deferred revenue journal, How to review and post the deferred revenue journal to Xero or QuickBooks, and How to set up revenue recognition journals in ScaleXP.
Find out more about the detailed backup available, including line level balance sheet movements, in How to download invoice line level detail behind the deferred revenue journal.
Section 1 - suggested journal(s) and post journal button
Section 1 shows your Suggested Journal(s) and allows you to post automatically to your accounting system.
- This is the incremental journal after any journals previously posted.
- It will only include revenue accounts selected in the Filter accounts by box (top left of report).
Section 1 is the difference between Section 2 (Comprehensive Journal) and Section 3 (Journals Already Posted). Previously posted journals include all journals posted to the selected deferred revenue account, both via ScaleXP and otherwise.
Click on the down arrow by any account to reveal detail by tracking code, Location or Class
Click on the Post journal button in Section 1 to produce a draft journal in Xero or a journal in QuickBooks. This will prompt you to download an Excel file to keep as reference, then type "Confirm" to create the draft journal.
- As soon as the accounting system has been updated, you will see a link to the journal so that you can easily review and submit it.
- If you have a suggested journal for a locked period in your accounting system, ScaleXP will suggest posting the journal to the earliest subsequent unlocked period. You will be asked to confirm the date to which you wish the journal posted, as shown below.
Section 2 - comprehensive journal
Section 2 is the full journal before taking into account previous postings. This section matches the detailed line item backup provided for the journal.
The Comprehensive Journal (Section 2) is calculated as follows:
- Move all revenue to the balance sheet. For all revenue accounts selected in the filter (top left), revenue invoiced to those revenue accounts in the month is moved to your selected deferred revenue balance sheet account. This is shown in Section 4 as invoiced revenue and again, this time as an amount to be subtracted, in Section 5 as revenue deferred.
- Add recognized revenue earned in the month. This is shown in Section 6c. This is total revenue recognized by ScaleXP (Section 6a) less any revenue already recognized via an accrual journal in ScaleXP (Section 6b). Detail on the revenue recognized by ScaleXP is found in Section 9, Detail by Customer; you can read more about this section below.
Section 3 - journals already posted
Section 3 shows journals already posted, in order to remove them from the suggested journal and avoid double counting. This includes journals posted via ScaleXP as well as all other manual journals impacting the filtered accounts.
- For journals posted via ScaleXP, journals posted as late adjustments are shown in the month that matches the revenue recognition, not the month of posting.
- This “late adjustment" (Section 3b) is only available for journals posted via ScaleXP.
Section 4 - invoiced revenue
Section 4 shows invoices coded directly to revenue, by issue month. This shows all invoices coded directly, in your accounting system, to the account(s) in the filter, totaled by the month the invoice was issued.
- This information is used to calculate the deferred revenue journal as per Section 5 below.
- When more than one revenue account has been selected, you can see the detail split by revenue account by clicking on the chevron to the right of the report heading.
Section 5 - defer revenue (always equals Section 4)
Section 5 shows deferral of invoices coded directly to the P&L. Only accounts included in the filter are shown. This section forms part of the journal calculation in Section 1.
Section 6 - recognize revenue
Section 6c shows revenue recognized from the balance sheet. This is based on total revenue recognized in 6a, which is based on your selected journal methodology.
- Section 6a shows all revenue recognized by month, as calculated by ScaleXP. This is based on invoices in your accounting system and other revenue you have added into ScaleXP.
- Section 6b shows accrued revenue in ScaleXP.
- Section 6c shows deferred revenue based on 6a less 6b. This forms part of the journal calculation in Section 1.
Section 7 - balance sheet liability accounts (for reference)
Section 7 shows balance sheet liability accounts.
- Section 7a shows deferred revenue as calculated by ScaleXP based on invoices in your accounting system that have an issue date on or prior to the balance sheet month and are included in your filter.
- Section 7b shows deferred revenue as currently in your accounting system. Note that this may include revenue from revenue accounts not included in your filter. If you have more than one deferred revenue balance sheet account, click on the arrows to see detail by account.
Section 8 - total revenue (as calculated by ScaleXP)
Section 8 shows recognized revenue for the filtered accounts. If you have filtered for more than one account, click on the arrows to see detail by account code.
- Section 8a shows recognized revenue as calculated by ScaleXP.
- Section 8b shows the revenue currently in your accounting system.
Section 9 - detail by customer
Section 9 shows detail of revenue recognition by customer. This shows the detail of recognized revenue as calculated by ScaleXP. You can see detail by invoice by clicking on the arrows next to the customer name. Use the download arrow (top right) to download this detail, as shown on the screen. If you require more detail, use the line level download available as part of the revenue recognition reports.
This also shows the ending deferred revenue balance sheet by customer, in the final column.
Related articles
How to set up the deferred revenue journal
How to review and post the deferred revenue journal to Xero or QuickBooks
How to adjust the starting balance sheet for deferred revenue
How to set up revenue recognition reporting and automated revenue journals
How to configure and validate revenue recognition in ScaleXP
How to set up revenue recognition journals in ScaleXP
How to download invoice line level detail behind the deferred revenue journal