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Bookkeeping Models

Depending on your business, the nature of your products and the governing tax laws, you may have to set up a dedicated strategy for producing bookkeeping data for invoices and payment balances. JustOn provides a number of discrete settings whose combinations allow you to model your dedicated use case.

Options

Revenue recognition rules control the way invoice line items are transformed into booking details:

  • one to one – Default
  • multiple revenue bookings per invoice line item, distributed to future booking periods, allowing for revenue deferral – Booking Month
  • multiple revenue bookings per invoice line item, distributed to future service period months, allowing for revenue deferral – Service Month
  • one to one, aligned to a (future) booking period, allowing for revenue deferral – Service Period
  • multiple revenue bookings per invoice line item, split along shortfall amounts – Shortfall
  • multiple revenue bookings per invoice line item, split along margins – Margin Scheme

For details, see Applying Revenue Recognition, Handling Deferred Revenue, Handling Shortfall Amounts and Margin Scheme-Based Bookings.

Tax recognition rules control the booking detail creation for tax amounts:

  • one per invoice line item – Default
  • multiple tax bookings per invoice line item, synced with split revenue bookings – Sync With Revenue

For details, see Applying Tax Recognition.

Last but not least, taxation rules decide how to process invoice line items that span multiple time-based tax rules:

  • splitting invoice line items along tax rule validity periods, resulting in multiple revenue and tax bookings per original invoice line item – Service Period (default)
  • keeping unsplit invoice line items, applying the tax rate of the date of the revenue booking – Booking Date
  • keeping unsplit invoice line items, applying the tax rate that is valid at the end of the service period – End of Service Period
  • keeping unsplit invoice line items, applying the tax rate that is valid at the end of each month of the service period – End of Monthly Service Period

For details, see Managing Taxation Rules.

Info

For businesses in Europe (Germany, in particular), the type of product or service you invoice determines the timing of the tax origin and hence, which rules to apply. Contact your tax consultant to define the appropriate way for your business.

Use Cases

Use Case Revenue Recognition Rule Tax Recognition Rule Taxation Rule Notes
Standard Default Default Service Period Produces 1 revenue booking and 1 tax booking per invoice line item, splits invoice line item (and resulting bookings) along tax rule validity
Monthly payment (rent or leasing) Service Month Sync with Revenue End of Monthly Service Period Involves a staged payment plan using monthly installments
Produces multiple revenue bookings and synced tax bookings per invoice line item (distributed by service period months), tax origin and tax due date at the end of each service period month
Covers permanent invoice ("Dauerrechnung")
Monthly payment (w/o fixed payment dates) Booking Month Default Service Period Requires global setting Move Tax Booking Details to Payment Date, see payment date-based tax booking
Produces multiple revenue bookings (distributed by calendar months) and 1 tax booking per invoice line item, tax origin at the service period end but payable on effective payment receipt
Covers deferred revenue ("passive Rechnungsabgrenzung")
Advance payment, SaaS ("other service") Booking Month Default End of Service Period Produces multiple revenue bookings (distributed by calendar months) and 1 tax booking per invoice line item, tax origin at the service period end but payable on expected payment receipt at the service period start
Covers deferred revenue ("passive Rechnungsabgrenzung")
Advance payment, delivery Service Month Default Booking Date Produces multiple revenue bookings (distributed by service period months) and 1 tax booking per invoice line item, tax origin and tax due date on expected payment receipt at the service period start
Covers deferred revenue ("passive Rechnungsabgrenzung")
Advance payment Service Month Default Service Period Produces multiple revenue bookings (distributed by service period months) and 1 tax booking per invoice line item, tax origin at the service period end (by default – if applicable, split along tax rule validity) but payable on expected payment receipt at the service period start
Covers deferred revenue ("passive Rechnungsabgrenzung")