Learn how to setup unearned or deferred revenue in QuickBooks and how to use ProRata to automate your journal entries.
By default, QuickBooks does not create a Deferred Revenue account for your company. You can easily add a new liability account by following these instructions by Intuit QuickBooks Support. Once you have created the new account, you will need to start recording your journal entries. We have outlined how to calculate deferred revenue and which transactions to post in another article.
The two basic journal entries for deferred revenue and earned revenue for a $12,000 annual subscription will be:
Deferred Revenue Journal Entry
- Debit Cash: $12,000
- Credit Deferred Revenue: $12,000
Earned Revenue Journal Entry
- Debit Deferred Revenue: $1,000
- Credit Revenue: $1,000
How to Automate Deferred Revenue Journal Entries in QuickBooks?
This is where ProRata comes in. ProRata can integrate with your QuickBooks Online account and automatically post journal entries at the right time. Here’s how it works:
- You configure your companies services, products and pricing.
- Any time you bring on a new customer, you enter the customer’s subscription details in ProRata.
- ProRata automatically creates journal entries the QuickBooks charts of accounts that you choose.