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Revenue Schedules and Deferred Revenue

What is this page about: How to set up revenue schedules in Light so deferred revenue from sales invoices and contracts is recognised automatically over time, and how to configure release templates, apply them to invoice and contract lines, and view the generated recognition entries.

On this page

  • How Deferred Revenue Works in Light
  • Setting Up a Release Template
  • Applying a Schedule on a Sales Invoice
  • Applying a Schedule on a Contract
  • Renewing Contracts with Revenue Recognition
  • Viewing Generated Releases
  • Frequently Asked Questions
  • Related Articles

Recognising revenue over time usually means a spreadsheet, a recurring reminder, and a pile of manual journal entries every month. Light replaces all of that with release templates (also called amortization templates): set the rules once, apply them to a sales invoice line or a contract line with a start and end date, and Light takes care of generating the periodic recognition entries automatically from then on.

Key terms used on this page:

  • Release template, amortization template, and accrual template all refer to the same object in Light. The setup screen calls it a release template. On an invoice or contract line, the field you click is labelled "Releases"; the template picker inside that popover shows "Accrual template" as its placeholder text. You may also see the object referred to as "Amortization Template" in that document's change history.
  • Deferred revenue is revenue that has been invoiced or contracted but not yet fully earned, and is recognised gradually over the service period rather than all at once.
  • Revenue schedule is the resulting set of periodic recognition entries that a release template generates once applied to a document.

How Deferred Revenue Works in Light

Light keeps deferred revenue configuration where the revenue actually originates, on the document itself, rather than in a separate module you have to remember to update. It's driven by release templates set to type AR (for sales invoices) or Revenue contract (for contracts):

  1. Set up a release template once (defines method, contra account, default duration)
  2. Apply it to a sales invoice line or a contract line, with a start and end date
  3. When the document is posted, Light generates the full schedule of monthly recognition entries automatically (the cadence is always monthly, regardless of how the total duration is set)

The configuration lives on the document line rather than on a separate "Revenue schedules" page, so the schedule always stays attached to the transaction that created it.

Setting Up a Release Template

Navigate via Settings (gear icon) → Releases templates, then create a template with:

  • Type: for deferred revenue, choose Accounts receivables (for AR invoices) or Revenue contract (for contracts). The Type dropdown also lists Accounts payables, Journal entry, and Fixed asset for other kinds of schedules, though those aren't relevant to revenue recognition.
  • Name: a label so you can identify the template when applying it to invoice or contract lines
  • Method: Straight line with partial adjustment (the only method available for AR/Revenue contract types)
  • Contra Account: the deferred revenue balance sheet account
  • Contract Asset Account (Revenue contract only)
  • Default Duration (months): pre-fills the duration when applied
  • Initial Amount Percentage and Residual Amount Percentage: set what portion of the total is recognised in the first and last period of the schedule
  • Context and Accumulate past amounts as needed

See Deferred Entries (Accruals and Deferrals) for full template details.

Applying a Schedule on a Sales Invoice

On a sales invoice line, click the Releases field. A popover opens with:

  • A Date range picker (From / To)
  • An accrual template picker (its placeholder text reads "Accrual template")

Click Add accrual to apply, or Update accrual to modify an existing schedule. Remove removes the accrual entirely.

Applying a Schedule on a Contract

Open a contract and apply the release template on each line in the Lines tab, using the same Releases popover, date range, and template picker.

Renewing Contracts with Revenue Recognition

When you renew a contract that has accrual templates configured on its lines, Light automatically:

  • Extends the accrual end dates on contract lines that were tied to the original contract end date, matching them to the new end date
  • Creates a new deferred entry for the renewal period, spreading the additional revenue per the line's own accrual template (straight-line, or its initial/residual percentages, whichever the line is set up with), not necessarily a uniform spread

This keeps your revenue recognition consistent with how the line was already set up to recognise revenue, without anyone having to rebuild the schedule by hand at renewal time. The extension entry only covers the added period, so your overall recognition rate stays even across the full term even though it's generated separately from the original entries. If your contract lines' accrual end dates were not tied to the contract end date (e.g., they ended earlier), those schedules remain unchanged.

Viewing Generated Releases

Once the document is posted and the schedule is active, generated entries appear under Accounting → Releases (when the Releases module is enabled for your plan). From here you can see every recognition entry Light has scheduled, without having to reconstruct the timeline yourself.

Frequently Asked Questions

What triggers revenue recognition entries in Light?

Posting a sales invoice or contract that has a release template applied to its line. Light then generates the full schedule of recognition entries automatically.

Can I use one release template for both invoices and contracts?

No. For revenue schedules specifically, a template's Type must be set to Accounts receivables (AR) for sales invoice lines or Revenue contract for contract lines, and each template is scoped to one document type. (The Type dropdown also has a few non-revenue options, but those don't apply to deferred revenue.)

Which recognition method does Light support for deferred revenue?

Straight line with partial adjustment. It's the only method available when the template Type is AR or Revenue contract.

What happens to a revenue schedule when I renew a contract?

Light automatically extends the accrual end date on any contract line whose schedule was tied to the original contract end date, matching the new end date, and posts a new deferred entry for the extension period, following the line's own accrual template rather than a fixed uniform spread. Lines whose schedules ended earlier and weren't tied to the contract end date are left unchanged.

Where can I see the revenue recognition entries Light has generated?

Under Accounting → Releases, once the source document is posted and the Releases module is enabled for your plan.

Is there a separate page for managing revenue schedules?

No. The schedule configuration lives directly on the sales invoice line or contract line that it belongs to.

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