Process Deferred Accounting

Process Deferred Accounting is a tool that automatically creates journal entries to recognize deferred revenue and expenses over their service periods. Run this tool at the end of each accounting period.

How to Process Deferred Accounting

1. Go to Accounting > Process Deferred Accounting.
2. Select the Company.
3. Set the Posting Date (typically the last day of the period).
4. Select the Type: Revenue or Expense (or both).
5. The system calculates the amount to be recognized for the period.
6. Click Submit to create the journal entries.

What It Does

For each deferred revenue/expense record, the system:

• Calculates the number of days in the current period
• Divides the total amount by the total service days
• Multiplies by the period days to get the periodic amount
• Creates a journal entry moving the amount from Deferred (Liability/Asset) to Income/Expense

When to Run

• Monthly: At month-end closing
• Quarterly: At quarter-end
• Annually: At year-end (if not running monthly)

Example Journal Entry

For deferred revenue of SAR 1,000 per month:

• Debit: Deferred Revenue Account (reduces liability) SAR 1,000
• Credit: Revenue Account (recognizes income) SAR 1,000

Related Topics

• Deferred Revenue
• Deferred Expense