Deferred Entries (Accruals and Deferrals)

Deferred entries allow you to spread costs or revenue over multiple periods using release templates. This article explains how to set up templates and apply them to documents.

Navigate to this page via Settings → Records → Releases templates.

# What is this page about

This page covers release templates, which spread a cost or a revenue amount across several accounting periods. It explains how to create a template, how to apply one to a bill, invoice, or journal entry line, and where the resulting release entries appear.

On this page

• Understanding Deferrals
• Release Templates
• Applying a Template to a Document
• Viewing Releases
• Related Articles

# Understanding Deferrals

Deferrals spread a transaction across multiple accounting periods:

Deferral Example: you prepay for future services:

• You prepay annual insurance ($12,000)
• Expense should spread over 12 months ($1,000/month)
• Apply a release template to the bill to post $1,000 each month

Accrual Example: you owe for services received but not yet invoiced:

• You received professional services this month
• Create an accrual entry this month to match expense to the period

Both defer the GL impact across periods for proper matching.

# Release Templates

Release templates define the rules for how an amount is spread across periods. They are reusable and can be applied to AP bills, AR invoices, journal entries, contracts, or fixed assets.

# Template List

Navigate to Settings → Records → Releases templates to see all templates. The table shows:

# Creating a Release Template

1. Go to Settings → Records → Releases templates

2. Click Create release template. The New Releases template dialog opens

3. Fill in the fields:

   • Name: Descriptive name (e.g., "12-Month Insurance")
   • Type: Select what the template applies to:
     • Accounts payables: for AP bills
     • Accounts receivables: for AR invoices
     • Journal entry: for manual journal entries
     • Revenue contract: for contracts
     • Fixed asset: for fixed asset depreciation
   • Method: Select the amortization method:
     • Straight line with partial adjustment: equal amounts each period, available for all types
     • Reducing balance: decreasing amounts over time, available for AP, JE, and Fixed asset. Accounts receivables and Revenue contract templates always use straight line, so the Method picker is locked for them
   • Contra account: The balance sheet account (e.g., Prepaid Expenses, Accrued Expenses). Every template needs one, and it must already exist in your chart of accounts. For Fixed asset type this is the Depreciations Account.
   • Contract Asset Account (Revenue contract only): The contract asset account. Required to create the template, though the form leaves it unmarked
   • Additions Account (Fixed asset only): The additions account. Required for this type
   • Initial Amount Percentage (Straight line only): Percentage for the first period
   • Residual Amount Percentage (Straight line, non-Fixed asset only): Percentage kept as residual
   • Reducing Rate Percentage (Reducing balance only): The rate applied each period
   • Default Duration (months): Pre-fills the duration when applying the template
   • Context: Optional notes
   • Accumulation: How months that have already passed are handled when the schedule starts before the document's posting date: Off, Posting date or Open period. See Back-dating releases

4. Click Create

Light checks the percentages when you save:

• Straight line: the Initial and Residual Amount Percentages together can be at most 100%. For example, 20% and 80% saves, and 60% and 60% is rejected.
• Reducing balance: the Reducing Rate Percentage must be below 100%.

If a rule fails, Light shows an Error creating accrual template message and keeps the dialog open.

Note: The Contra account (and, where applicable, the Contract Asset, Additions, Disposal, Profit, and Loss accounts) on a release template cannot be an Accounts Payable or Accounts Receivable account. Using one returns an error when you create the template, and also blocks posting any document that still references an older template set up with such an account. Previously this could leave a bill stuck and unable to be marked paid or reconciled. If you hit this, edit the template to point to a non-AP/AR balance sheet account.

# Editing a Template

Open a template and click Edit to modify its fields. Click Save when done.

# Archiving a Template

To deactivate a template, open it, click the three-dot menu (⋯), select Archive, and confirm. Archived templates can no longer be applied to new documents, and the template picker lists active templates only. Lines that already use the template keep it. An archived template still opens from its own page, marked Archived and with Edit hidden.

# Applying a Template to a Document

Release templates can be applied per line item on AP bills, AR invoices, and journal entries.

# On an AP Bill Line

1. Open or create an AP bill

2. On a line item, click the Releases cell

3. A popover opens with:

   • Template selector, where you pick the release template to apply
   • From (optional) and To date pickers. To is optional too when the template has a default duration

4. Click Add amortization to apply

To update an existing amortization on a line, click the field again and click Update amortization.

To remove it, click Remove.

# On an AR Invoice Line

1. Open or create an AR invoice
2. On a line item, click the Releases cell
3. Pick the Accrual template and set the From (optional) and To dates
4. Click Add accrual. To change it later, click the cell again and click Update accrual

A bill's release schedule lives in the line's popover. Sales invoices also show the schedule on a Deferred revenue tab.

# Viewing Releases

Once a template is applied and the document is posted, Light generates the release entries. Navigate to Accounting → Releases to view all generated release entries.

Releases is available on plans where the feature is switched on, and to users whose role includes Releases access. Ask your admin if you cannot see it.

Use the filters to narrow the list:

• Book value: the amount still left to release, as of a date you pick. It defaults to today
• Type: the template type, such as Accounts payables or Fixed asset
• Progress: Completed or Not completed

Click a release to open its drawer, with a Book value chart over the release period and an Accrual template link back to the template that created it.

# Checking the postings

Each period's share posts as its own entry. To see them:

1. Go to Accounting → Transactions
2. Set the date range to cover the whole release period
3. Set the Account filter to the template's contra account. The Contra accounts column shows the other side of each entry
4. Change the Account filter to the line's expense or revenue account to see the same entries from that side

This page is also Light's fixed asset register: filter by Fixed asset type to see only fixed assets along with their Initial value and Book value (remaining). Fixed assets themselves are entered by applying a Fixed Asset release template to a journal entry, bill, or sales invoice line.

# Related Articles

• Creating manual journal entries
• Accounting document types and lifecycle
• Closing periods and month-end close