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Bookkeeping Data for Unbilled Revenue

Accounting Support

When billing subscriptions, the invoice creation may be "decoupled" from the subscription's service period for several reasons, like

  • your AR team waits for a purchase order before issuing the invoice,
  • your business usually issues invoices at the end of a service period, or
  • a quarterly invoice run.

Your accounting, however, may still require bookkeeping data for those items before they are actually invoiced. To support this scenario, JustOn can generate preliminary bookkeeping data based on active subscriptions. This bookkeeping data is of the type Unbilled Revenue.

When creating and finalizing the corresponding invoices, the existing subscription-based bookkeeping data is reverted. Consequently, the reverted bookkeeping data offsets the previous unbilled revenue. The actual revenue bookkeeping data for the invoice is generated in addition.

Info

The support for subscription bookkeeping data is available as of JustOn 2.58.

Bookkeeping Data for Subscriptions

Subscription Bookkeeping Data Structure

Bookkeeping data is structured in booking periods and booking details. Booking periods and booking details are in a master-detail relationship.

A booking period represents one month in bookkeeping. Hence, it aggregates the booking details produced for this month. Booking periods are grouped by business entities.

Be aware that the booking period status finally decides the booking detail allocation:

  • Open: A booking period with the status Open aggregates the booking details produced for this month.
  • Closed: A booking period with the status Closed is ignored. Any booking details produced for this period are moved to the next open booking period.

    booking_detail_period
    Booking detail allocation with closed booking periods

Note

Make sure to establish business processes to close booking periods according to your requirements.

A booking detail represents a record in an accounting ledger. JustOn creates one booking detail per subscription item. Basically, it holds the same data as a booking detail produced from an invoice line item, except for

  • Invoice
  • Invoice Line Items
  • Invoice No

These fields are not set since there is no invoice produced yet.

Subscription Bookkeeping Data Workflow

To create unbilled revenue bookkeeping data, JustOn provides the Unbilled Revenue Job. This job "simulates" a monthly invoice run, creating the unbilled revenue bookkeeping data based on subscriptions for each past month if there are no corresponding invoices yet. When started on 2021-10-01, for example, JustOn creates unbilled revenue bookkeeping data up to September.

With respect to the unbilled revenue bookkeeping data generation, be aware of the following specifics:

  • JustOn generates booking details for subscription items of the following types: Recurring, Recurring Prorated, Recurring Prorated AVG, One-Time and Minimum Fee.

    The following items are ignored: transactional items, one-time items without billing unit and billing period, and items without start time (or relevant subscription start time).

  • Unbilled revenue always produces two types of bookkeeping data:

    • Revenue – to be booked on the usual revenue account
    • Unbilled Revenue – to be booked on a dedicated receivables account

    Once the invoices are created and finalized, the subscription-based bookkeeping data is completely reverted, offsetting the previous bookings. The actual revenue bookkeeping data for the finalized invoice is generated in addition.

  • Unbilled revenue bookkeeping data is always created on a monthly base. That is, they may differ from the invoice bookkeeping data if you use longer (or shorter) billing periods or invoice run periods. JustOn makes sure, however, that the subscription-based bookkeeping data is properly reverted upon invoice finalization.

  • JustOn does not update existing subscription bookkeeping data.
  • For the simulated invoice run, JustOn ignores the lead time and the billing practice.
  • If there is no unbilled revenue bookkeeping data for a subscription, JustOn creates the corresponding bookkeeping data from the subscription start up to the previous month.
  • The start date is either the subscription start date, the earliest item start date (as long there is no item without start date) or the date of the last invoice created for the subscription. If none of these dates is available, the subscription is ignored.
  • You can set account numbers or business partner account numbers for unbilled revenue bookkeeping data using the Collective Accounts custom setting.
  • You can control whether the bookkeeping data for a subscription is created or not using the custom field CreateUnbilledRevenue on the subscription, see Enabling Unbilled Revenue Creation on Subscription Basis.
  • For periods for which invoices have already been issued, JustOn does not generate subscription bookkeeping data.

JustOn stores the start date for the next booking detail generation in the Item field Next Booking Detail Start. This field is used to determine the start date for generating new booking details when the bookkeeping data creation job is started.

Info

JustOn recommends to create a report to detect subscription booking details that are not yet assigned to an invoice after the accounting year has expired. Possible findings may indicate, for example, that there were some invoices not created or finalized, or that you need to manually clear bookkeeping accounts.

Subscription Bookkeeping Data Example

The following example illustrates the behavior described above.

Think of a subscription over a net 12000,00 with a service period of one year from 2020-01-01 to 2020-12-31. You invoice the subscription in December 2020. You want the unbilled net revenue recorded for the period from January to November – 1/12 for every month.

Once set up as necessary, JustOn creates two booking details every month (= booking period) from January through November: one Unbilled Revenue debit booking to be booked on the relevant receivables account, and one Revenue credit booking to be booked on the usual revenue account.

# Booking Period Type Amount Debit/Credit Flag Account Contra Account
1 2020-01 Revenue 1000,00 H (Credit) Revenues Debtor
2 2020-01 Unbilled Revenue -1000,00 S (Debit) Receivables Debtor
3 2020-02 Revenue 1000,00 H (Credit) Revenues Debtor
4 2020-02 Unbilled Revenue -1000,00 S (Debit) Receivables Debtor
...
21 2020-11 Revenue 1000,00 H (Credit) Revenues Debtor
22 2020-11 Unbilled Revenue -1000,00 S (Debit) Receivables Debtor

On invoice creation in December, JustOn reverts the previous unbilled revenue bookings: it creates one (large) Unbilled Revenue credit booking to offset the previous 11 Unbilled Revenue debit bookings, and another (large) Revenue debit booking to offset the previous 11 Revenue credit bookings.

# Booking Period Type Amount Debit/Credit Flag Account Contra Account
23 2020-12 Revenue -11000,00 S (Debit) Revenues Debtor
24 2020-12 Unbilled Revenue 10000,00 H (Credit) Receivables Debtor

Of course, JustOn also creates the relevant booking details for the finalized invoice. Assuming a tax rate of 19%, they will be like

# Booking Period Type Amount Debit/Credit Flag Account Contra Account
25 2020-12 Revenue 12000,00 H (Credit) Revenues Debtor
26 2020-12 Tax 2280,00 H (Credit) Taxes Debtor

Unbilled Revenue Tax Handling

The global setting Unbilled Revenue Tax controls the tax handling when generating unbilled revenue bookkeeping data. There are three options:

Option Description
Net (or empty) Creates net booking details for both Unbilled Revenue and Revenue
Gross Creates gross booking details for both Unbilled Revenue and Revenue
Net+Tax Creates net booking details for Revenue and Tax, and gross booking details for Unbilled Revenue