Service Titan Knowledge Base

Attribute deferred revenue to a membership recurring service add-onLast updated on 09/13/2022

Attribute deferred revenue to add-on items when you want to split deferred revenue unevenly between recurring services. This is helpful for businesses with multi-trade memberships—for example, memberships for HVAC and plumbing services where the HVAC visit would have a higher value than the plumbing visit. Adding positive and negative revenue items to recurring service invoice templates, which allocates revenue from membership add-ons to a recurring service instead of dividing it evenly, benefits accountants by eliminating oversight from customer service representatives (CSRs) and dispatchers. It also eliminates the need to create many Pricebook items to accommodate calculating deferred revenue for multiple recurring services.

Things to know

  • Deferred revenue is a type of income used in accrual accounting. When selling a good or service, the revenue that a business receives from a sale is considered unearned until the promised services are delivered. In ServiceTitan, those services are recurring services that accompany a membership.

  • It refers to advance payments received for service that will be delivered or performed in the future. It is also known as unearned revenue.

  • Deferred revenue is considered a liability because it is revenue that has not yet been earned. It represents products or services owed to a customer.

  • It is labeled Earned on the income statement after the products or services have been delivered.

Setup deferred revenue in the Membership setup guided workflow

A membership is required for this workflow. For more information on the membership setup guided workflow, see Calculate deferred revenue for memberships.

In the Revenue Recognition section of the third step of the membership setup guided workflow, choose the following options:

  • Is the membership revenue recognized at the point of sale or deferred?

    • Deferred

  • Do you want ServiceTitan to calculate deferred revenue for you automatically?

    • Yes, calculate automatically

  • Do you want to divide the revenue evenly between each recurring service?

    • Yes or no

  • How do you want to recognize deferred revenue when you dismiss a recurring service event?

    • Always recognize revenue when dismissing a recurring service event.

  • If a cancelled membership has a deferred balance remaining, how do you want to resolve the difference with customers?

    • Option to create a charge/refund invoice.

Create a pricebook item to be calculated using deferred revenue

Add a Pricebook item to attribute to deferred revenue as an add-on. The total price will be broken up based on the quantity you select in the Edit Service window and the number of times the recurring service occurs.

  1. Go to the navigation bar and click Pricebook.

  2. Click Services.

  3. Click Add Service.

  4. Enter the details for Code, Name, and Item Description. Note: Code, Name and Item Description are the only fields that need to be filled in to save.  

  5. In the Categories field, select a category.

  6. In the General Ledger Account field, add a liability account

  7. Select the Deferred Revenue checkbox. Note: Account configuration is required to use this feature. To update your account, please contact Technical Support

  8. After you have selected Deferred Revenue click Workflow.

  9. Select the Adjust the membership being sold checkbox to add additional tasks to the recurring service invoice template. 

  10. Select Add additional tasks to the recurring service invoice template to add recurring services to the invoice template. 

  11. Click Add tasks/materials.

    The Create Invoice Template window opens.

  12. In the Create Invoice Template window, click Add Service

    1. Search for your service in the Search field.

    2. In the Quantity field, enter the amount of times this service will be performed per year. Note: This will be calculated as deferred revenue.

  13. When you are finished adding services and materials, click Add to Recurring Service

  14. The Create Recurring Service Invoice Template closes and returns you to the Edit Service Workflow screen. If you are finished, click Save.  

Your recurring service add on is attributed to deferred revenue.

Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.

Disclaimer: Information provided in this article is for informational purposes only and it should not be construed to be legal advice. Information provided in this article may also not constitute the most up-to-date legal or other information. You should not act or refrain from acting on the basis of any information in this article to meet any compliance requirements without seeking independent legal or other professional advice.