--- title: "Set up deferred revenue for membership types" slug: "set-up-deferred-revenue-for-membership-types" tags: ["Area - Memberships", "Focus - Service Replacement", "Role - Accountant", "Role - Admin", "Type - Residential"] updated: 2026-10-16T01:13:53Z published: 2026-10-16T01:13:53Z canonical: "help.servicetitan.com/set-up-deferred-revenue-for-membership-types" --- > ## Documentation Index > Fetch the complete documentation index at: https://help.servicetitan.com/llms.txt > Use this file to discover all available pages before exploring further. # Set up deferred revenue for membership types ## Overview If you use Deferred revenue in your accounting, set up your Membership types so that revenue is automatically recognized as income whenever you provide Recurring service events included with a membership. --- ### ****Who uses this feature**** - Accountants, bookkeepers, and administrators - Primarily benefits Residential Service and Replacement business types - Applies to all trades ****Feature Configuration**** - Account configuration is required. Please contact [Technical Support](https://go.servicetitan.com/#/ask) for details. ## Things to know - Before you configure a membership type, make sure you [set up deferred revenue](/residential-s-r/docs/set-up-deferred-revenue). ## Configure deferred revenue for a membership type To configure deferred revenue settings for a membership type, [edit the membership type](/residential-s-r/docs/edit-membership-types): 1. Click **SAVE & NEXT** until you reach the *Revenue Recognition* screen of the RECURRENCES section.![Editing membership details](https://cdn.document360.io/961862ab-d0f2-4d91-bb62-a62ee8184eff/Images/Documentation/set-up-deferred-revenue-for-membership-types-image-85kk8mfv.png?sv=2026-02-06&spr=https&st=2026-11-09T11%3A30%3A09Z&se=2026-11-09T12%3A30%3A09Z&sr=c&sp=r&sig=Gwwp45sMmSfDVRwujCn6slNs%2FajqV%2FRsdHtMH%2B2ECvo%3D) 2. For *Is the membership revenue recognized at the point of sale or deferred?*, select **Deferred**. ![Membership editing interface](https://cdn.document360.io/961862ab-d0f2-4d91-bb62-a62ee8184eff/Images/Documentation/set-up-deferred-revenue-for-membership-types-image-mz4vkab4.png?sv=2026-02-06&spr=https&st=2026-11-09T11%3A30%3A09Z&se=2026-11-09T12%3A30%3A09Z&sr=c&sp=r&sig=Gwwp45sMmSfDVRwujCn6slNs%2FajqV%2FRsdHtMH%2B2ECvo%3D) 3. Select whether you want deferred revenue calculated for each recurring service event automatically or manually. - **No, I will calculate manually:** Use the deferred revenue values in the Invoice template of the Recurring service type. - **Yes, calculate automatically**: Use the Memberships Wizard to calculate deferred revenue for each recurring service type. If you select *Yes, calculate automatically*, select if you want to divide revenue evenly between recurring service events. > [!NOTE] > **Note:** Any recurring revenue values in the invoice templates of recurring service types attached to the membership type are overwritten by the values calculated by the Memberships Wizard. - ***Yes****: The Wizard assigns an equal percentage of the membership price to each recurring service event. For example, if a $500 membership includes four water filter replacements and four water quality tests, the Wizard allocates revenue as follows: $500 membership fee / 8 recurring service events = $62.50/recurring service event* - ***No****: Manually assign percentages to allocate for each included recurring service type. Make sure that the total equals 100%. For example, using the previous example membership, you assign 80% to water filter replacements and 20% for water testing, the Wizard allocates revenue as follows:* ***Water filter replacement*** *$500 membership fee * 80% allocation / 4 recurring service events = $100/water filter replacement* ***Water testing*** *$500 membership fee * 20% allocation / 4 recurring service events = $25/water quality test* ![Revenue allocation options](https://cdn.document360.io/961862ab-d0f2-4d91-bb62-a62ee8184eff/Images/Documentation/set-up-deferred-revenue-for-membership-types-image-w6tobzna.png?sv=2026-02-06&spr=https&st=2026-11-09T11%3A30%3A09Z&se=2026-11-09T12%3A30%3A09Z&sr=c&sp=r&sig=Gwwp45sMmSfDVRwujCn6slNs%2FajqV%2FRsdHtMH%2B2ECvo%3D) 4. Under *How do you want to recognize deferred revenue when you dismiss a recurring service event?*, select what happens when a recurring service event is dismissed: - **Always recognize revenue when dismissing a recurring service event**: When a recurring service event is dismissed, deferred revenue is automatically recognized - **Give the option to recognize revenue when dismissing a recurring service event:** When a recurring service event is dismissed, a notification appears asking if deferred revenue should be recognized or not > [!NOTE] > **Note:** Dismissing a recurring service event without recognizing deferred revenue can result in incorrect revenue reporting. ![](https://cdn.document360.io/961862ab-d0f2-4d91-bb62-a62ee8184eff/Images/Documentation/set-up-deferred-revenue-for-membership-types-image-l3o0v8mc.png?sv=2026-02-06&spr=https&st=2026-11-09T11%3A30%3A09Z&se=2026-11-09T12%3A30%3A09Z&sr=c&sp=r&sig=Gwwp45sMmSfDVRwujCn6slNs%2FajqV%2FRsdHtMH%2B2ECvo%3D) 5. Under *If a canceled membership has a deferred balance remaining, how do you want to resolve the difference with customers?*, select how you want to handle a deferred revenue balance for a canceled membership: - **Always create a charge/refund invoice:** A charge/refund invoice is automatically generated for the balance of deferred revenue - **Option to create a charge/refund invoice:** You have the option to create a charge/refund invoice for the remaining balance - **Do not create a charge/refund invoice:** You do not have the option to create a charge/refund invoice. ![](https://cdn.document360.io/961862ab-d0f2-4d91-bb62-a62ee8184eff/Images/Documentation/set-up-deferred-revenue-for-membership-types-image-lajlbdwh.png?sv=2026-02-06&spr=https&st=2026-11-09T11%3A30%3A09Z&se=2026-11-09T12%3A30%3A09Z&sr=c&sp=r&sig=Gwwp45sMmSfDVRwujCn6slNs%2FajqV%2FRsdHtMH%2B2ECvo%3D) 6. When you’re done, click **SAVE & NEXT**. ## Want to learn more? - Visit ServiceTitan Academy and enroll in [Deferred Revenue Memberships](https://servicetitan.docebosaas.com/academy/learn/courses/352/Validate-and-Sell-Deferred-Revenue-Memberships) - See [Customer Memberships report template](/residential-s-r/docs/customer-memberships-report-template) - See [Create membership types](/residential-s-r/docs/create-membership-types) Deferred revenue is used in accrual accounting to manage advanced payment for upcoming services. After accepting payment, you only recognize it as income upon delivery of services, when the revenue is earned. Memberships use deferred revenue to account for recurring services included with a membership. [Learn more →](https://help.servicetitan.com/docs/memberships-glossary) · [See the full glossary →](https://help.servicetitan.com/docs/glossary-overview) **a.k.a.** deferred income The template used to set up a membership for a customer. It includes recurring service types, tags, pricing, accounting details, and duration and billing details. [Learn more →](https://help.servicetitan.com/docs/memberships-glossary) · [See the full glossary →](https://help.servicetitan.com/docs/glossary-overview) Recurring service events appear in Follow Ups where they can be booked into jobs. They are scheduled based on the frequency details of a service location's recurring services. The recurring service event includes details from the recurring service to help job booking. [Learn more →](https://help.servicetitan.com/docs/memberships-glossary) · [See the full glossary →](https://help.servicetitan.com/docs/glossary-overview) Invoice templates are used to generate invoices for recurring services and billing invoices. They include the pricebook items for services performed during a recurring service job or for periodic billing of ongoing memberships. [Learn more →](https://help.servicetitan.com/docs/memberships-glossary) · [See the full glossary →](https://help.servicetitan.com/docs/glossary-overview) The template used to set up recurring services for a service location. It includes details to help book recurring service events into jobs including job type, business unit, recurrence type, and duration type. [Learn more →](https://help.servicetitan.com/docs/memberships-glossary) · [See the full glossary →](https://help.servicetitan.com/docs/glossary-overview) When sold, a customer membership is configured from the membership type. You add customer-specific details like billing information, service location, and recurring services. [Learn more →](https://help.servicetitan.com/docs/memberships-glossary) · [See the full glossary →](https://help.servicetitan.com/docs/glossary-overview)