Deferred Revenue: Revenue Recognition in Microsoft Dynamics 365 Finance – Part 2

In Part 1 of the Revenue recognition series, we reviewed how to enable revenue recognition in Dynamics 365 Finance and Operations. In this article, we are going to review what setups are required to defer the revenue during Sales Order Invoicing. We will try to keep the setup to a minimum to get you started on deferred revenue.

Here are the minimum setups required to start the Deferred revenue processing:

1. Revenue Recognition Journals
   1. Help create and post the entries to General ledger that originates from Revenue recognition
   2. Revenue Schedule
      1. Help determine the period for the revenue recognition
      2. Help determine the default dates that are entered for the revenue schedule that is created when the invoice is posted
      3. Item Group: Item groups help specify the General ledger accounts to be used

Revenue recognition journals

The journal name needs to be created and set up. To create the journal name, go to Revenue recognition > setup > Journal names.

Tip – The voucher service number sequence selected above should be company specific, not shared.

Once the journal name is created, set up the default journal name under Revenue Recognition > Setup > General Ledger Parameters > Revenue recognition tab.

Select the journal name created in the previous step in the ‘Revenue recognition journal name’ field.

Revenue schedule

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