Invoices - Ability to recognise future revenue
The ability to recognise future revenue from the invoice.
Purpose: To find out the future revenue, because for some businesses the invoice that they’ve issued to their customer is the revenue for the future month.
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Hi all, appreciate the interest and rationale in wanting to be able to recognise revenue of a sale at a date different to that of the invoice or payment date.
While this maybe a function we look to explore in the long-term we want to be upfront that this is not something we'll be developing in the near term. In the meantime it may be best to look into connected apps that can solve for revenue recognition. We'll be sure to let you know if there's any change around this, here.
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Paul Freudenberg commented
To confirm then, Accrual Accounting is not supported in Xero.
Which is the best product for doing this; Quickbooks, Sage? Thanks for the insight. Paul
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FABC Finance commented
This would be a very helpful feature - please reconsider developing it.
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Chad Leembruggen commented
I must be missing something in the system, as it is just basics. The ability to pay an invoice (say for an annual subscription or registration fee) and have that split over the period of time the registration is for, eg 12 months, so it is recognised in the P&L as a monthly cost to the business (if it's a 12 month fee).
This surely is already there? -
Damian Clark commented
This app is working towards being a cost-effective solution for deferred revenue (and also forecasts from the repeating invoices schedules, and more)
Early stages but the roadmap is interesting
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Karim Ichouti commented
We should be able to book sale invoice or purchase invoice with a period (start and end dates) and the software could be able to automate the cut-off.
Several accounting softwares have already this function.
Xero should catch-up this function before losing the clients. -
Edward Bird commented
Crazy. we are a Saas business. the model requires accounting treatment which recognises a multi-month or year subscription over time. It wastes hours of my time and my book keeper's time in dealing with the platform's lack of support for this feature, costs my business money as well. I do not recommend your product for any Saas or susbcription business.
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Sami Andreani commented
Hello Xero users, I have found a workaround with the minimum amount of manual steps, using a software called GAccon, let me know if you need help in setting this up
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Jamie Robertson commented
Very disappointing to see this is not even planned let alone in the product.
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Robert Webber commented
Allow for the revenue of an invoice to be recognised over a period of time, as defined by the user.
Ideally, you should also be able to recognise a "carve-out" (i.e. a % of the invoice) upfront, and then the remainder is spread over the invoice period.
What would also be great is to be able to define the revenue recognition of multi-year contracts. For example, you may have locked in a client for 3 years at Y1 = £100, Y2=£120, Y3=£140. You would then want to recognise the revenue of the locked in contract value (£360) over the 36 months (£10 per month assuming no carve-out).
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Ran Heimann commented
Please help me understand how a SaaS Accounting software does not offer essential accounting tools for SaaS businesses?
Is Xero using Xero for its own accounting? Is this the real reason why there is no annual pricing option for Xero?
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Ben James commented
As noted below - as a saas business that needs to recognize revenue over the contract period we will eventually leave xero just for this issue.
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Sam Holmes commented
Manually moving expenses to P&l from prepayment assets for bills for services that span financial years is a pain. Why not allow me to allocate an invoice to a time span when it arrives, then get Xero to automatically release it from prepayments to the P&l without any further intervention from the user.
Could do the same thing on invoices I raise for eg. A subscription for the year ahead. Automatically release revenue to the P&l month by month based on date span information contained in the invoice.
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Jose Francisco Fernandez Aragon commented
I can't believe it's 2023 and you still don't offer this feature. Most tech businesses are SaaS and most of us sell yearly packages. This is a must for all of us.
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Peter Oneppo commented
Without this feature, Xero is basically a non-starter for SaaS companies who don't want to do a ton of manual entries each month.
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Jim Morrish commented
A critical requirement. I'm constantly amazed that Xero doesn't support this. The same applies to phased recognition of costs/ invoices paid in advance.
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Darshi Kasotia, CPA commented
Please develop this feature so that I can use it for a few new clients that I am working with.
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Milan Delaporte commented
Please develop this feature as soon as possible, it is critical for my company
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Andy Mellor commented
If Xero aren't doing this then I suggest peopl have a look at ScaleXP, really good for recurring rev reconciliation etc.
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Michelle Wright commented
As our business grows this is a critical element we need for our reporting, I am surprised reading all the comments this is not even been considered by Xero.
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Guy Shalvi commented
very very helpful as we charge many income in advance invoices