Create pricebook service items for deferred revenueLast updated on 09/13/2022

• Before you start, make sure your GL includes deferred revenue liability and income accounts. For more information, see Set up your General Ledger accounts.

• You must have Pricebook permissions enabled to edit pricebook items.

To account for deferred revenue, create two pricebook service items:

• A positive-dollar service item to recognize revenue in your income GL account

• A negative-dollar service item to deduct an equal amount from your liability GL account

Add both items to the recurring service invoice template so that:

• The correct amount of deferred revenue is recognized

• The invoice equals $0.00, since the recurring service is included with the membership

For more on invoice templates, see Configure invoice templates for deferred revenue.

Create a positive-dollar service item

1. Go to the navigation bar and click Pricebook.

2. In the side menu, click Services.

3. Click Add Service. The Add a Service screen opens.

4. Enter details in the Code, Name, and Item Description fields to indicate that the item is used for recognizing deferred revenue. For example, name the item Recurring Service Event - Recognized Revenue. Note: The item name and description display on the customer invoice.

5. Select Taxable if the item is taxable.

6. In the Price field, enter a positive-value dollar amount for the amount of deferred revenue you want to recognize for each recurring service event. Tip: If you use the Memberships Wizard to automatically calculate deferred revenue, enter 1.00. The amount adjusts based on your membership type settings.

7. In the General Ledger Account field, enter the name of the income GL account where you want the revenue recognized.

8. Click the Categories dropdown and select the membership category or subcategory where you want to access the item.

9. When you’re done, click Save.

Create a negative-dollar billing item

1. Go to the navigation bar and click Pricebook.

2. In the side menu, click Services.

3. Click Add Service. The Add a Service screen opens.

4. Enter details in the Code, Name, and Item Description fields that indicate that the item is used for deferring revenue. For example, name the item Recurring Service Event - Deferred Revenue. Note: The item name and description display on the customer invoice.

5. Select Taxable if the item is taxable.

6. In the Price field, enter a negative value equal to the positive-dollar item. Tip: If you use the Memberships Wizard to automatically calculate deferred revenue, enter -1.00. The amount adjusts based on your membership type settings.

7. In the General Ledger Account field, enter the name of the liability GL account from where you want to deduct the deferred revenue.

8. Click the Categories dropdown and select the membership category or subcategory where you want to access the item.

9. When you’re done, click Save.

• Watch Deferred Revenue Membership Programs

• See Add services to your pricebook.