We love GP and our GP Support North team wants to help you get more out of your investment in Dynamics GP, specifically how to handle Revenue and Expense deferrals associated with subscription and service contracts.
Unlocking Financial Agility: Demystifying Revenue and Expense Deferrals in Dynamic GP in 2023
Dynamics GP has an expansive financial core, enabling you to simplify your everyday processes for your finance team. The revenue recognition and expense deferral capabilities in Microsoft Dynamics GP play a crucial role in financial reporting, ensuring compliance with accounting standards and providing a clearer picture of your organization's financial performance.
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Easily defer the recognition of revenue or distribute expenses within Dynamics GP’s revenue and expense deferral module. By turning on these functions, GP will allow you to make entries for future periods within the G/L, receivables management, payables management, sales order processing, purchase ordering processing, and invoice applications. You can also save time and mitigate error by eliminating saved reoccurring batches in your G/L such as subscription billing or specialized SLA and contract billing.
The Deferral module has two methods for deferral postings, Balance Sheet posting, and Profit/Loss posting. Balance sheet postings are traditionally used for future expense or revenue deferrals while the profit/loss method can be used for retroactive deferral transactions by reversing posted amounts and transferring the amount to a deferral account.
- For Purchasing and Sales series decide whether you want to Balance Sheet or Profit /Loss
- For the Balance Sheet posting, two accounts will be involved: Deferred and recognition accounts. Details for these accounts can be found under “Deferral Profiles.”
- For the Profit/Loss method, under Deferral Profiles displays the account information of:
- original posting
- deferral cost (billing) (when the deferral is applied, often the same as the original posting)
- Balance of the deferral amount
- Balance for when the deferral is recognized
- Profit/Loss for when the deferral is recognized
- Audit Trail Code “ALTRN” Deferral code to find the posting.
- Default Calculation Method: decide the distribution of the deferral for a specific period
- Decide automatic functions such as auto post into closed future GL periods, void deferrals with the original transaction, and user accessibility
For clients with a higher volume of recurring contract billing or complex revenue allocation, you may want to consider the 3rd-party add-on modules from Binary Stream including "Advance Revenue and Expense Deferral" (ARED) and Advanced Recurring Contract Billing (ARC-B) within their Subscription Billing suite for Dynamics GP and Business Central.
- Create straight-line or event-based deferrals
- Advanced reporting of deferral balance, waterfall, or declining balance
- Create price escalation of discounts
- Usage-based billing controls
For more on the advanced features Binary Stream has to offer visit, https://www.gpsupportnorth.com/partners/binarystream/
About GP Support North
GP Support North is a large team of Microsoft Dynamics GP (Great Plains) consultants at Endeavour Solutions, dedicated to supporting clients using Microsoft Dynamics GP (Great Plains) ERP. We are your safe-haven for long-term GP support and consulting services. We will not force you to change platforms, but if and when you are ready, we can help migrate you to the cloud.
2023: Our focus is on providing a "Safe-Haven" for Microsoft Dynamics GP users to gain access to expert GP support, GP training, GP upgrades, and consulting services for Microsoft Dynamics GP for the next 10+ years.
We love Dynamics GP (Great Plains) and have more than 550 active clients across North America predominately in the USA and Canada. We believe that GP has a long and prosperous future, and we are here to support you and your team.
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