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Main2026

Posted June 16, 2024

The “Deferred Schedule” setting under Application Setup must have one of the following selected:

Earn on Receipt Earn Date Only
Recognizes revenue only on the receipt earn date, regardless of when the invoice was issued. In other words, the timing of the invoice doesn't affect when the revenue is recognized. Instead, it's solely based on the earn date listed on the receipt. So, even if an invoice was issued earlier or later, the revenue will be recognized only on the specific date when it's earned.
Earn on Invoices Before Earn Date
Revenue is primarily recognized on the earn date. However, if an invoice is issued before the earn date, the revenue related to that invoice is recognized on the date of the invoice itself. This means that the timing of the invoice impacts when the revenue is recognized. If the invoice date precedes the deposit date, the revenue is recognized as of the deposit date.
Earn on Invoices Always
Recognizes deferred revenue on the earn date, unless there's an invoice associated with the transaction. If an invoice exists, the system adjusts to recognize revenue based on the invoice date, regardless of whether it's before or after the earn date. This means that the timing of the invoice determines when revenue is recognized, overriding the earn date. If the invoice date precedes the deposit date, revenue is recognized as of the deposit date, aligning with the invoice's timing.

Ensuring Accurate Revenue Recognition: Key Requirements

Crediting the Unearned/Deferred GL Account:
To initiate the revenue recognition process, every receipt must be credited to an Unearned/Deferred GL Account. This step ensures that revenue is appropriately recorded and accounted for in our financial statements.
Linking Unearned/Deferred GL Account to Accounts Receivable (A/R):
The Unearned/Deferred GL Account must be directly linked to an Accounts Receivable (A/R) account. This linkage establishes a clear connection between the deferred revenue and its corresponding receivable, facilitating seamless tracking and reconciliation.
Alignment of Earn Date with Deposit Date:
Crucially, the Earn Date must align with or occur after the Deposit (or Credit) date. This requirement ensures that revenue recognition occurs in accordance with the timing of financial transactions, maintaining consistency and accuracy in our accounting records.

Transactions affecting Deferred Revenue and Accounts Receivable remain consistent regardless of whether the invoice precedes or follows the Earn Date.

In the realm of (Re) Enrollment Contracts, the utilization of new logic depends on the Auto-Pay Configuration settings, particularly the association of the Unearned/Deferred GL Account with an Accounts Receivable (A/R) account. When linked with an A/R account, receipts align their Earned Date with the contract invoice's Issued Date, while their credit account mirrors the Unearned/Deferred GL Account, streamlining transaction records. Conversely, when the Unearned/Deferred GL Account lacks A/R association, the receipt credit account will match the invoice A/R account, and the Unearned/Deferred GL Account is specified on the invoice/receipt association just like before.

For billing automation, the calculation of Earn Dates is critical for streamlining invoice processing, whether through manual multi-action or automatic setups within Auto-Pay Configuration. Earn Dates are automatically determined as the day following the conclusion of the fiscal year associated with the receipt, contingent upon the presence of a suitable unearned credit account.