Revenue accrual on a product

In Kleer a product can be set up so that its revenue is accrued over the period the delivery covers, instead of being recognised in full on the delivery date.

This manual describes how to set up revenue accrual on a product.

Prerequisite

The Income distributed over a period of time setting is only shown on the product if the function is activated for the company. If the function is not activated, the section is not shown on the product page.

Set the accrual principle on the product

1. Go to Products in the settings and open the product you want to edit.
2. Find the section Income distributed over a period of time.
3. Choose a value under Accruals basis of accounting in the list. The principle controls how the revenue is distributed over the period. The available options include:
   • Distribute everything on the delivery date: the whole revenue is recognised on the delivery date.
   • 100% on month before delivery date.
   • Distribute over the exact number of days of the period.
   • Distribute over the number of months of the period.
   • Equal per month: first and last month adjusted proportionally.
   • Distribute over the number of months of the period, excluding the last month if the period is partial.
   • 40% on delivery, 60% during the period (the same with 50%, 60% and 80% on delivery): the share is recognised on delivery and the rest is distributed over the remainder of the period.
4. The choice is saved when the product is saved.

Things to keep in mind

• The accrual principle decides how the revenue of the product is distributed in the income statement over time.
• Choose the principle that matches how the delivery actually takes place. If the delivery is a single event, distribution on the delivery date fits. If it stretches over a period, one of the distributing principles fits better.