What is Deferrred Revenue?
Deferred revenue, also known as unearned revenue, is a liability on a company’s balance sheet that represents revenue received for goods or services not yet delivered or performed. It arises when a business receives advance payments from customers before the actual delivery of products or completion of services. Deferred revenue is common in subscription-based businesses, software companies, and service providers that require upfront payments.
Deferred revenue is recognized as revenue over time as the company fulfills its obligations. For example, if a customer pays $1,200 upfront for a one-year subscription to a software service, the company would initially record this amount as deferred revenue. Each month, as the service is provided, the company would recognize $100 in revenue, reducing the deferred revenue balance accordingly.
Proper accounting for deferred revenue is crucial for accurate financial reporting and compliance with accounting standards such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). It ensures that revenue is recognized in the appropriate periods, matching the delivery of goods or services with the associated revenue.
Managing deferred revenue effectively provides insights into future revenue streams and helps businesses forecast cash flow. It also highlights the company’s obligations to deliver products or services, which is essential for resource planning and operational efficiency.
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Absorption Pricing
Accounts Receivable
ACH
Advance Billing
AI Agent Pricing
AI Model Pricing
AI Token Pricing
AISP
ARR
ASC 606
Automated Investment Services
Automated Invoicing
Basing Point Pricing
Basket-based Pricing
Billing Cycle
Billing Engine
Captive Product
Channel Incentives
Channel Pricing
Choke Price
Churn
Clearing and Settlement
Commercial Pricing
Competitive Pricing
Consolidated Billing
Consumption Based Pricing
Contribution Margin-Based Pricing
Conversation Based Pricing
Cost Plus Pricing
Cost-Based Pricing
CPQ
Customer Based Pricing
Customer Profitability
Deal Management
Deal Pricing Guidance
Deal Pricing Optimization
Decoy Pricing
Deferrred Revenue
Digital Banking
Discount Management
Dual Pricing
Dunning
Dynamic Pricing
Dynamic Pricing Optimization
E-invoicing
E-Money
EBIDTA
Embedded Finance
Enterprise Resource Planning (ERP)
Entitlements
ERP
Feature-Based Pricing
Finance AI
Fintech
Fintech Ecosystem
Flat Rate Pricing
Freemium Model
Frictionless Sales
Generative AI Pricing
Grandfathering
Guided Sales
Hedonic Pricing
High-Low Pricing
Hybrid Pricing Models
Idempotency
IFRS 15
Insurtech
Intelligent Pricing
Invoice
Invoice Compliance
KYC
Lending-as-a-Service (LaaS)
Lifecycle Pricing
Loss Leader Pricing
Margin Leakage
Margin Management
Margin Pricing
Marginal Cost Pricing
Market Based Pricing
Metering
Micropayments
Minimum Commit
Minimum Invoice
MRR
Multi-currency Billing
Multi-entity Billing
Neobank
Net Dollar Retention
Odd-Even Pricing
Omnichannel Pricing
Open Banking
Outcome Based Pricing
Overage Charges
Pay What You Want Pricing
Payment Gateway
Payment Processing
Peer-to-peer Lending
Penetration Pricing
PISP
Predictive Pricing
Price Benchmarking
Price Configuration
Price Elasticity
Price Estimation
Pricing Analytics
Pricing Bundles
Pricing Efficiency
Pricing Engine
Pricing Software
Product Pricing App
Proration
PSD2
PSP
Quotation System
Quote Request
Quote-to-Cash
Quoting
Ramp Up Periods
Real-Time Billing
Recurring Payments
Region Based Pricing
RegTech
Revenue Analytics
Revenue Backlog
Revenue Forecasting
Revenue Leakage
Revenue Optimization
Revenue Recognition
SaaS Billing
Sales Enablement
Sales Optimization
Sales Prediction Analysis
SCA
Seat-based Pricing
Self Billing
Smart Metering
Stairstep Pricing
Sticky Stairstep Pricing
Subscription Management
Supply Chain Billing
Tiered Pricing
Tiered Usage-based Pricing
Time Based Pricing
Top Tiered Pricing
Total Contract Value
Transaction Monitoring
Usage Metering
Usage-based Pricing
Value Based Pricing
Volume Commitments
Volume Discounts
WealthTech
White-label Banking
Yield Optimization
Why Solvimon
Helping businesses reach the next level
The Solvimon platform is extremely flexible allowing us to bill the most tailored enterprise deals automatically.
Ciaran O'Kane
Head of Finance
Solvimon is not only building the most flexible billing platform in the space but also a truly global platform.
Juan Pablo Ortega
CEO
I was skeptical if there was any solution out there that could relieve the team from an eternity of manual billing. Solvimon impressed me with their flexibility and user-friendliness.
János Mátyásfalvi
CFO
Working with Solvimon is a different experience than working with other vendors. Not only because of the product they offer, but also because of their very senior team that knows what they are talking about.
Steven Burgemeister
Product Lead, Billing