This article explains how to release accred revenue booked via ScaleXP into your accounting system.

If you need information on the full process-- that is, how to add and then release accrued revenue, see How to automate accrued revenue journal posting, to add and release accrued income.

Where to review and release accrued revenue

Once accrued revenue has been added to your revenue recognition and journals, use the “Release Accrued Revenue” page (via Journals tab) to release the accrued revenue in your selected month.

Rules used for releasing accrued revenue

Once accrued, 

• all line items in one accrued invoice or manual accrued revenue entry must be released at the same time.
• the release date must be a single month.

The revenue release date works as follows:

• All revenue accrued prior to the release date will be released on the release date
• All accrued revenue on or after the release date will be cancelled.

Hint:  If you need to release different line items at different times (or in more than one month), you will need to remove (delete or remove from accrued revenue) the existing accrued revenue and create separate accrued revenue entries or separate future or draft invoices.

How the release date is set

The release date is automated for issued invoices and draft invoices converted to issued invoices; for manual invoices, you select the release date.

Automated (for accrued invoiced):

• For accrued draft invoices, the system will automatically release the accrual using the issue date of the invoice when approved (issued).
• For issued invoices, the system will automatically use the issue date of the invoice
• This applies to all line items in the invoice.

Manual (for accrued revenue you added manually):

• You can select the release date using the “release” function
• By default, the system will choose the current date as the release date for manual issued invoices  - you can edit this to meet your requirements.
• This date applies to all line items in the manual accrued revenue element created (acts like an invoice accrual).
• For manual accrued revenue which has been invoiced, choose the release date of the issued invoice.

Impact on reporting

Manual accrued revenue

• Once released, accrued revenue is removed from MRR, ARR and Revenue Recognition reporting.  
  • this is because it is assumed to be replaced by one of these:
    1. a back-dated issued invoice accrued in its place 
    2. a cancellation, also back-dated or 
    3. a new manual accrual
  • this applies to all types of accrued revenue, however, there are different implications for each type:
    • accrued invoice amounts (draft or future dated) are replaced in reporting by back-dated amounts in the issued invoice, based on issue date
    • manual invoice amounts are removed on the assumption that some else - like an issued invoice - is replacing them 
    • If there is no associated issued invoice, MRR, ARR and Revenue Recognition effectively are restated as if the accrued revenue had never been made
  • this means that if an issued invoice (or new manual accrued revenue entry) shows back-dated revenue different than what was accrued in prior months, MRR, ARR  and Revenue Recognition will be restated; this is to reflect the current view of services/value delivered at that time 
• In IFRS reporting, the accrued and released amounts are both included in the IFRS totals - in this case, amounts prior to release are not restated
  • If there is no associated issued invoice, the IFRS view retains 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 issue date