What is Deferred Revenue? Deferred revenue is revenue you have received payment for but can not be realized. Think of it as pre-payment for goods or services that a company is expected to provide to the purchaser at a later time. Deferred revenue is also called unearned revenue because, as the name states, it has not […]
About Rob Farmer
Rob is the CEO and co-founder of ProRata, a web-based financial application that helps companies simplify and automate revenue recognition.
Entries by Rob Farmer
In May of 2014 the FASB and IASB issued a press release offering joint recommendations regarding revenue recognition (link to press release). This recommendation is especially important for software companies when dealing with customer contracts. Until this guidance was available there was no agreed upon standard between GAAP and IFRS standards. Why is revenue recognition […]
Revenue recognition may be a mysterious concept to a lot of software startup founders, but it is an important accounting concept to understand when running a business. Revenue Recognition Criteria When a product or service is sold, certain conditions must be met for that product or service to be recognized as revenue. If you sell a […]
QuickBooks revenue recognition can be a manual process, however ProRata can automate this process for your company.
The FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) recently published a joint revenue standard that changes the way companies can recognize revenue. It provides a single standard for all companies in all industries. (read the joint standards document here) How the FASB Revenue Standards Affects SaaS Companies If you use generally accepted […]
Monthly Recurring Revenue measures the current revenue the company generates in a given month.
Learn how to setup unearned or deferred revenue in QuickBooks and how to use ProRata to automate your journal entries.
For SaaS companies, Annual Recurring Revenue is an important metric to track. It measures the current revenue the company generates in a 12 month period.
Deferred revenue is a important accounting concept for SaaS companies who have long term agreements such as annual and multi-year subscriptions. We will explain why and how to calculate deferred revenue.
What is the difference between earned and unearned revenue? When using the accrual basis accounting method, revenue must be recorded as it is earned regardless of when payment is received.