--- title: "Set up deferred revenue" slug: "set-up-deferred-revenue" tags: ["Area - Memberships", "Focus - Service Replacement", "Role - Accountant", "Role - Admin", "Type - Residential"] updated: 2026-10-16T01:11:32Z published: 2026-10-16T01:11:32Z canonical: "help.servicetitan.com/set-up-deferred-revenue" --- > ## 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 ## Overview Use Deferred revenue to recognize a portion of a membership fee as income when you provide a recurring service included with the membership. In a given month, recognized revenue offsets the cost of providing these services, which can help you manage cash flow and profitability. --- ### ****Who uses this feature**** - Accountants, bookkeepers, and administrators - Primarily benefits Residential Service and Replacement business types - Applies to all trades ## ## Things to know - The Memberships Wizard helps automatically calculate deferred revenue for a Membership type. You can also configure deferred revenue manually. - You can manually edit deferred revenue for an individual customer’s membership without affecting the membership type settings. - Use the [Customer Memberships report template](/residential-s-r/docs/customer-memberships-report-template) to track deferred revenue. ## What is deferred revenue? 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. For example, for an annual membership fee of $200, customers receive quarterly air filter changes. With deferred revenue: - The upfront membership fee of $200 is deferred in a General Ledger (GL) liability account. - For each quarterly filter change, the invoice debits $50 from the liability account and recognizes $50 in the income account. ## Set up memberships for deferred revenue With deferred revenue, for sold memberships, recurring service event invoices are prefilled for your technicians and recurring revenue is automatically accounted for in your GL account. Follow these steps to set up deferred revenue: #### Step 1. Set up your General Ledger accounts Set up a GL liability account for deferred membership revenue and a GL income account for recognized membership revenue in QuickBooks: - [Set up GL accounts in QuickBooks Desktop](/residential-s-r/docs/qbd-onboarding-step-1-set-up-quickbooks-general-ledger-accounts-qbd) - [Set up GL accounts in QuickBooks Online](/residential-s-r/docs/qbo-onboarding-step-2-set-up-gl-accounts-in-quickbooks-online) You can also map membership-related service items in your pricebook to Item GL Groups in Intacct: - [Map Pricebook items to Intacct Item GL groups](/residential-s-r/docs/intacct-onboarding-step-4-map-pricebook-items-to-item-gl-groups) #### Step 2. Create Pricebook service items for deferred revenue These Pricebook service items appear on invoices for Recurring service events. One item debits deferred revenue from the GL liability account, the other credits the revenue in the GL income account. Follow these steps: - [Create pricebook service items for deferred revenue](/residential-s-r/docs/create-pricebook-service-items-for-deferred-revenue) #### Step 3. Configure invoice templates for deferred revenue Invoice templates are used to generate invoices for recurring service events. Set up invoice templates with the deferred revenue billing items from your pricebook: - [Configure invoice templates for deferred revenue](/residential-s-r/docs/configure-invoice-templates-for-deferred-revenue) #### Step 4. Configure recurring service types for deferred revenue Recurring services included with a membership are based on a Recurring service type. Follow the steps to set up a recurring service type for deferred revenue: - [Configure recurring service types for deferred revenue](/residential-s-r/docs/configure-recurring-service-types-for-deferred-revenue) #### Step 5. Set up deferred revenue for membership types Set up a membership type to include a deferred revenue recurring service type. You can also configure the membership type to automatically calculate deferred revenue for each recurring service event: - [Set up deferred revenue for membership types](/residential-s-r/docs/set-up-deferred-revenue-for-membership-types) ## Want to learn more? - See [Customer Memberships report](/residential-s-r/docs/customer-memberships-report-template) 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) 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) The package of service visits included with a membership. When you sell a membership, recurring services are attached to the customer service location with details including start dates, service recurrence, and preferred technician. These details are used to create recurring service events. [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)