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sp019
May 21, 2019
Question

Subscription / annuity transactions

  • May 21, 2019
  • 1 reply
  • 0 views

I run a Software as a service company

We Bill the customers up front an annual amount for there subscription but need to account for the amount monthly.

Is there a way to enter a single invoice for the customer and then have the software spread the amount evenly over 12 months in the accounts?

At the moment we manage all the detail in excel and use journals each month to ensure the correct values are shown - this is far from ideal, prone to error and not sustainable

Thanks

 

1 reply

Rustler
Rustler
May 21, 2019

create a liability account called pre-paid service or something like that

 

the item you use on the invoice should link to that liability account

 

create a journal entry in recurring transactions and schedule it monthly

debit the pre-paid liability account

credit income

for 1/12th of the total amount

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