The Revenue / Expense Deferral module in Dynamics GP is one of three options we regularly use to assist our clients in managing their deferred revenue.
The deferral module is the easiest to use, is quite flexible, and provides a solid report option that ties out to the balance sheet account(s) you use to hold deferred amounts.
The deferral module allows you to defer amounts from a specific GL distribution. The GL distribution can be from the GL, RM, PM,SOP, Invoicing, or POP module. Essentially what the module does, is automatically create GL entries into the future, to match the deferral schedule.
The deferral schedule can be created from scratch each time you need to create one, or you can use a Deferral Profile that can specify, the length of deferral, GL accounts used, start date, etc.
Below is the result of a deferral profile being “allocated” to a GL distribution for a $50,000 software sale. The sale is being deferred evenly out, over three years.
In this case, when the invoice is posted, the credit amount for the sale will go to a balance sheet account, ‘2115’, instead of a sales account. At posting, the deferral module will create 36 GL transactions spanning the next 36 months, that will debit the “Deferral Account”, and credit the “Revenue Recognition” account.