This article explains how ScaleXP releases accrued revenue that has been booked through ScaleXP, the rules that set the release date, and how releases affect MRR, ARR and IFRS reporting. For the full process — adding accrued revenue, releasing it and posting the journal — see How to automate accrued revenue journal posting, to add and release accrued income.

Where to review and release accrued revenue

Once accrued revenue is in your journal, open Release Accrued Revenue from the Journals tab — it is the second task under 2. Accrued Revenue on the Month-End Check List. The page lists every customer with accrued revenue in the months displayed. Black figures are revenue, the accrued revenue movement in the month; blue figures are the accrued revenue balance as shown on the balance sheet at month end. The summary table shows the total, the accrued revenue added and the accrued revenue released for each month.

Releases are automatic: when an invoice is issued, ScaleXP matches it and releases the accrued revenue on the issue date, so no action is needed. Manual accrued revenue is the exception — you release it yourself when the invoice is issued, or write it off.

How the release date is set

Accrued invoices (automatic). For a draft invoice that you accrued, ScaleXP releases the accrual on the invoice's issue date as soon as it is approved and issued. For an issued invoice that you accrued, ScaleXP uses the issue date of the invoice. The release applies to every line item on the invoice.

Manual accrued revenue. You choose the release dates when you click Release Accrued Revenue on the entry. ScaleXP suggests today's date for both the Release Date / Start Date and the Release End Date. To release in a single month, set both to the issue date of the invoice that replaces the accrual. To release over time, set the Release Date / Start Date to the first month and the Release End Date to the last month — the accrued balance is released evenly across the months in between. The dates apply to every line item in the manual entry, which behaves like an invoice accrual.

Rules used for releasing accrued revenue

Once revenue has been accrued:

• All line items in one accrued invoice or manual accrued revenue entry are released on the same dates.
• A release is either a single month or an even spread across a release period, from the Release Date / Start Date to the Release End Date.
• Revenue accrued before the release date is released on the release date, and any accrued revenue dated on or after the release date is cancelled.

If you need to release different line items on different dates, remove the existing accrual (delete it, or remove the invoice from accrued revenue) and create separate accrued revenue entries or separate draft invoices, one for each release schedule.

Release or write off manual accrued revenue

1. Check the banner at the top of the page. If a manual entry has been outstanding for a long time with no invoice, ScaleXP flags it as 1 manual accrued revenue entry needs review — click View items to see the customer, amount, the date it was added and how long it has been waiting. The customer's row also carries a Needs review chip showing the age of the entry.
2. Expand the customer and find the manual entry — its reference starts with AC-.
3. Click Release Accrued Revenue. The window shows the original accrual under Accrued Revenue Record and the release under Accrued Revenue Release Record. Edit the release Description if you wish, then set the Release Date / Start Date and Release End Date — the same date to release in one month, or a range to release evenly over time.
4. Click Save & Release Accrued Revenue.
5. To write the accrual off instead, click the bin icon. This removes the accrued revenue so no separate release is needed; if it has already been journaled, ScaleXP suggests the reversal.
6. To change the entry, click the pencil icon.

Once you have finished, click Continue to Post Journal → to review and post the accrued revenue journal.

Release accrued revenue over time

Releasing over a period lets you use accrued revenue to smooth recognition across a contract — for example, to spread the value of a free month across the months that are invoiced. Add the accrual for the value of the free period with its Start Date and End Date in the free month, then release it with a Release Date / Start Date at the first invoiced month and a Release End Date at the contract end. Each invoiced month is reduced by the same amount, so revenue is recognized straight-line and the accrued income balance unwinds to zero by the end of the contract. Worked examples for free periods, annual uplifts and $0 extensions are in How to handle revenue recognition for multi-year contracts with different annual amounts, free periods, and contract extensions.

Impact on reporting

Once released, accrued revenue is removed from MRR, ARR and revenue recognition reporting, because it is assumed to be replaced by one of the following: a back-dated issued invoice accrued in its place, a back-dated cancellation, or a new manual accrual. This applies to every type of accrued revenue, with different implications for each:

• Accrued invoice amounts (draft or future-dated) are replaced in reporting by the back-dated amounts on the issued invoice, based on its issue date.
• Manual accrued revenue amounts are removed on the assumption that something else, such as an issued invoice, replaces them.

If there is no associated issued invoice, MRR, ARR and revenue recognition are restated as if the accrued revenue had never been made. If an issued invoice (or a new manual entry) shows back-dated revenue that differs from what was accrued in earlier months, MRR, ARR and revenue recognition are restated to reflect the current view of the services delivered at that time.

In IFRS reporting, the accrued and released amounts are both included in the IFRS totals, so amounts before the release are not restated. If there is no associated issued invoice, the IFRS view keeps the historic accrued amounts and takes a profit reduction in the release month; if an associated invoice is issued, the release is offset by the grouped-up back-dated revenue on the issue date. See IFRS / GAAP reporting versus revenue recognition for the difference between the two views.

Related articles

• How to automate accrued revenue journal posting, to add and release accrued income
• How to automate accrued revenue suggestions as part of revenue recognition
• How to set up revenue recognition journals in ScaleXP
• IFRS / GAAP reporting versus revenue recognition
• How ScaleXP reads dates
• How to add a manual invoice to adjust ScaleXP revenue recognition to match your accounting system
• How to handle revenue recognition for multi-year contracts with different annual amounts, free periods, and contract extensions
• How to identify required journal adjustments