Deferred Revenue Waterfall by Customer

Learn how the Deferred Revenue Waterfall report calculates deferred revenue balances, future movements, variance, and monthly projections.

Contents

• Report Description
• Report Calculations
  • Deferred Revenue Balance
  • Future Amounts
  • Variance
  • Total Amount by Month
• Predefined Filters
• Drill-Down Capability
• Report Behavior
  • Posted Invoices
  • Revenue Recognition
  • Billing and Revenue Schedules
  • Draft and Posted Invoices
  • Manual Journal Entries
  • Subscription Amendments
  • Subscription Cancellations
  • Credit Notes and Refunds
• Use Cases
• Important Considerations
• FAQs

Report Description

The Deferred Revenue Waterfall report shows the balance of Deferred Revenue accounts as of the selected reporting date and projects future changes based on applicable billing and revenue schedules.

The report helps users analyze how deferred revenue is expected to change over future periods as billing and revenue recognition activities occur.

Purpose

The report is designed to help accounting and finance teams:

• Track current deferred revenue balances
• Forecast future deferred revenue movements
• Reconcile billing activity with revenue recognition
• Identify expected deferred revenue balances after future postings

Report Calculations

Deferred Revenue Balance

Represents the total balance of all Deferred Revenue accounts as of the end of the selected period.

Formula

Future Amounts

Represents the total projected change in deferred revenue after the selected date. 

Future amounts are derived from:

• Billing Schedule postings (increase deferred revenue)
• Revenue Schedule postings  (decrease deferred revenue)
• Draft Invoice amounts
• Future-dated postings, where applicable

Billing activity generally increases deferred revenue, while revenue recognition decreases deferred revenue.

Formula

Variance

Represents the expected remaining deferred revenue balance after all future billing and revenue schedules have been posted.

This helps validate whether all deferred revenue will eventually be recognized.

Formula

Total Amount (By Month)

Total Amount shows the net deferred revenue movement for each future month.

Each monthly amount reflects:

• Billing events (+) increasing deferred revenue 
• Revenue recognition (−) reducing deferred revenue
• Draft invoices
• Future postings

The monthly values provide the waterfall projection across future periods.

Predefined Filters

The report includes predefined filters that you can use to refine the results. Expand the Filters panel to view and modify the available criteria.

Reporting Currency

The Reporting Currency determines the currency used to display amounts in the report.

Depending on the available currency options, you can:

• View transactions in their original reporting currency.
• Convert transactions into another selected currency.

Drill-Down Capability

You can click any value in the report (except Variance) to open the Deferred Revenue Waterfall Detail report.

The detail report provides supporting data such as:

• Journal Entries
• Billing Schedule Lines
• Revenue Schedule Lines

Use the detail report to trace deferred revenue movements back to their source transactions.

Report Behavior

Posted Invoices

When an invoice is posted, the resulting Journal Entry can increase the Deferred Revenue balance.

Key behavior

• Posted transactions affect the current Deferred Revenue Balance.
• Future transactions affect the applicable future projection.

The resulting amounts depend on how the applicable subscription charges and schedules are configured.

Revenue Recognition

Revenue recognition reduces deferred revenue as revenue is recognized over time.

For example:

Each revenue recognition event reduces the deferred revenue balance or projected future amount, depending on when it occurs.

Billing and Revenue Schedules

When a subscription charge has both billing and revenue schedules:

• Billing Schedule postings increase deferred revenue.
• Revenue Schedule postings decrease deferred revenue.

For example:

Draft and Posted Invoices

Draft and posted invoices are treated differently.

When a draft invoice is posted, its treatment changes from a future projection to a posted transaction reflected in the applicable balance.

Manual Journal Entries

Manual Journal Entries can affect the Deferred Revenue Balance when they are posted to a GL account with the Deferred Revenue account subtype.

Future-dated Journal Entries may be included according to the report's applicable posting and date logic.

Unposted Journal Entries are not included in the report.

Subscription Amendments

When a subscription is amended, its billing and revenue schedules may be updated.

For example, if a subscription is upgraded during its term:

• Billing schedules may be updated.
• Revenue schedules may be updated.
• Future deferred revenue projections may change.

The report reflects the applicable schedule changes in future periods.

Subscription Cancellations

When a subscription is canceled before the end of its original term, applicable future revenue schedules may be removed or adjusted.

As a result:

• Future revenue recognition amounts may decrease or disappear.
• The remaining deferred revenue balance may change depending on the transactions already posted and the updated schedules.

Credit Notes and Refunds

Credit notes or refunds can reduce deferred revenue when they generate applicable accounting entries against Deferred Revenue accounts.

For example:

The actual impact depends on the accounting configuration and resulting Journal Entries.

Use Cases

Track Deferred Revenue

Use the report to view the current deferred revenue balance for the selected reporting period.

Forecast Future Deferred Revenue

Use future monthly amounts to understand how billing and revenue recognition are expected to affect deferred revenue.

Reconcile Revenue Recognition

Compare billing activity and revenue recognition schedules to identify expected deferred revenue movements.

Investigate Deferred Revenue Movements

Use the drill-down capability to trace report values to Journal Entries, Billing Schedule Lines, and Revenue Schedule Lines.

Important Considerations

Keep the following in mind when interpreting the report:

• Only GL accounts with Account Sub-Type = Deferred Revenue are included.
• The As Of date determines the reporting cutoff and the starting point for future projections.
• Draft invoices do not create Journal Entries until they are posted.
• Billing and Revenue Schedules affect future projections based on their applicable dates.
• Subscription amendments or cancellations can change future schedule amounts.
• Report results depend on the underlying GL accounts, Journal Entries, billing schedules, and revenue schedules.
• Applied filters can affect the displayed balances and projections.

UI: How to Run & Interact

For instructions on accessing reports, applying filters, changing reporting options, and interacting with report results, refer to: How to Run & Use Reports (UI Guide)

Sample Report Output

The Deferred Revenue Waterfall report displays the current deferred revenue balance and projected future movements across the selected reporting periods.

The report can be analyzed by applicable customer, subscription, account, and reporting-period filters.

FAQs

1. Why is my Deferred Revenue Balance different from my GL balance?

The Deferred Revenue Balance is calculated from posted Journal Entries associated with GL accounts whose Account Sub-Type is set to Deferred Revenue.

Possible reasons for a difference include:

• The GL account is not configured as Deferred Revenue.
• Journal Entries are missing or incorrect.
• Report filters are restricting the results.
• Customer or subscription filters are applied.
• Transactions have not yet been posted.

2. Why do I see values in Future Amounts but not in Deferred Revenue Balance?

Future Amounts represent projected activity that has not yet affected the current posted balance.

For example:

• A draft invoice can appear in Future Amounts.
• A posted invoice can affect the Deferred Revenue Balance.

3. Why is my Variance not zero?

Variance can differ from zero when the projected future activity does not fully reconcile with the current deferred revenue position.

Possible causes include:

• Missing or incorrect Revenue Schedules.
• Subscription changes.
• Manual Journal Entries.
• Incorrect or incomplete billing schedules.
• Data inconsistencies.

4. Do manual Journal Entries appear in the report?

Posted Journal Entries can appear when they affect GL accounts configured with the Deferred Revenue account subtype.

Unposted Journal Entries are not included.

Future-dated Journal Entries may be included according to the report's applicable date and posting logic.

5. Why are future months showing negative values?

Negative values generally represent revenue recognition or other activity that decreases deferred revenue.

6. Why are future months showing positive values?

Positive values generally represent billing activity or other applicable activity that increases deferred revenue.

7. How are Draft Invoices treated?

Draft Invoices do not create Journal Entries.

Applicable draft invoice amounts can appear in future projections. After an invoice is posted, the resulting accounting entry can affect the Deferred Revenue Balance.

8. What happens when a subscription is canceled?

Future billing or revenue schedules may be removed or adjusted based on the cancellation.

As a result, future projected amounts may change.

9. How are credit notes or refunds reflected?

Credit notes or refunds can reduce deferred revenue when the resulting accounting entries affect Deferred Revenue accounts.

The exact impact depends on the accounting configuration and resulting Journal Entries.

10. How does proration affect the report?

Proration can change the amount billed and the amount recognized as revenue.

As a result, the deferred revenue balance and future projections can change based on the applicable billing and revenue schedules.

11. Why is a transaction missing from the report?

Check the following:

• The GL account has Account Sub-Type = Deferred Revenue.
• The transaction has been posted, where applicable.
• The report filters include the relevant customer, subscription, account, and period.
• Applicable billing or revenue schedules exist.
• The transaction date falls within the report's applicable period.

12. When does the report update?

Report results can change when underlying transactions or schedules are updated, including:

• Journal Entries are posted.
• Billing schedules are generated or updated.
• Revenue schedules are generated or updated.
• Subscription amendments or cancellations change future schedules.
• Applicable invoices, credits, or refunds are posted.

13. What does the As Of date control?

The As Of date determines the reporting cutoff for the Deferred Revenue Balance and the starting point for future projections.

14. Can I use this report for financial reconciliation?

The report can support deferred revenue analysis and reconciliation.

Before using it for financial reconciliation, verify that:

• Relevant Journal Entries are posted.
• Deferred Revenue GL accounts are configured correctly.
• Billing Schedules are accurate.
• Revenue Schedules are accurate.
• Appropriate report filters are applied.
• No relevant transactions are missing.