--- title: "Deferrals" description: "Spread prepaid expenses and deferred revenue over the months they cover, with monthly entries posted for you." url: https://help.juan.ac/en/articles/9994257-deferrals collection: "Registers" updated: 2026-10-29 language: en --- # Deferrals Spread prepaid expenses and deferred revenue over the months they cover, with monthly entries posted for you. ## Q1. What is a deferral, and how does it work? - A deferral spreads a prepaid expense or deferred revenue over the months it covers, and Juan posts the monthly entries for you. - You may know these by other names: - **Prepaid expenses**: also called prepayments - **Deferred revenue**: also called unearned revenue or unearned income - How it works: - Record the bill, invoice, or journal once, and select a deferral account on the line item. - Register the line item, then set the start date and the number of months. - Juan schedules every monthly entry, so there’s nothing to do each month. - When the last entry posts, the deferral is Fully Amortized. - You’ll see two terms in Deferrals, depending on the type: - **Amortization**: for prepaid expenses, moving part of the cost to expense each month - **Recognition**: for deferred revenue, moving part of the advance payment to revenue each month ## Q2. When should I use a deferral? - Use a deferral when you pay or bill up front for something that covers more than one month. - **Prepaid expenses or prepayments**: you pay in advance for something you use over time, such as: - Annual insurance premiums - Rent paid in advance - Annual software subscriptions and licenses - Maintenance or service contracts - Advertising paid ahead of a campaign - **Deferred revenue, unearned revenue, or unearned income**: a customer pays or is billed in advance for something you deliver over time, such as: - Annual subscriptions or memberships - Retainer fees billed in advance - Support or maintenance contracts - Advance rent received from tenants - For example, say you pay PHP 120,000 on January 1 for a 12-month insurance policy. Without a deferral, January shows a PHP 120,000 expense and the other 11 months show nothing. With a deferral, each month shows PHP 10,000. ## Q3. Where do I find Deferrals, and who can use it? - Go to **Registers → Deferrals**. Any user with Registers access can use it. ![Registers navigation menu showing Fixed Assets, selected Deferrals, and Leases. Visible: Registers, Fixed Assets, Deferrals, Leases.](https://staticfiles.gleap.io/ghelparticle/ZJNwNizlC75P4284n8djWybzywPdSMTYK5AD6iPmimRKjGniBjTW9JH4bXSGSu5rQuAekQBU3rk.png) - The register has three tabs: - **Register**: your Active deferrals and your Drafts. Active prepaid expenses show Amortization Incomplete, and active deferred revenue shows Recognition Incomplete. - **Inactive**: deferrals that are Fully Amortized or Closed Out - **Eligible**: transaction line items waiting to be registered ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-x5gClA7NUoLH9djmNfYIKm3duUYwkKH8s0NjbY6iA2rhu9qtdyT1J2vjTsIJifyR4sOTbPdzuUd.png?v=1&k=a&s=api&e=1793361600&sig=5znywG_9tVpgh3zHUqmsmUnrNbr0WU71kkYERdZJaMM) - Each deferral shows its remaining value: the amount not yet moved to expense or revenue. ## Q4. How do I set up my deferral accounts? - Before your first deferral, create your deferral accounts in your chart of accounts: - Use the **Current Asset** account type for prepaid expenses. - Use the **Current Liability** account type for deferred revenue. - Go to **Registers → Deferrals**, open the arrow next to **Register Deferral**, and click **Manage Accounts**. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-xdnr8n6ojywe7Gpmhnf7XWQqCRNM3Oix5xay0o8MzNKv5aYTrxDwrPfbCfmQyEe7cHgTrRAiWCl.png?v=1&k=a&s=api&e=1793361600&sig=db5ev0R-DN1qWYVZbpC62xEseoWPyO6WsahKAw3E2o8) - Click **Select Accounts** and tick the deferral accounts you created. - Click **Save**. Each account appears with its account type and deferral category. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-CgmmPJnrXCxnHZhAqga56ZaKeC9NJrWqdnuXotqffNbyHK7pa2uQx28k62QxcpiLdHOvRd493FP.png?v=1&k=a&s=api&e=1793361600&sig=cdw38Rtg2p6H0t5zI0PgmWh-NOVYoy49QgIVoU0O23M) ## Q5. How should I record the bill, invoice, or journal? - Record the full amount once, in a single bill, invoice, or journal, dated when you’re billed or when you bill your customer. - Select your deferral account on the line item, not an expense or revenue account. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-nvN6X5sWxc6gOp55wLgYYAfV3Yrikbw6KygEzleHzpv9QL0Z8bmuJaBP7Q99AuJx4VmEx7qV3kh.png?v=1&k=a&s=api&e=1793361600&sig=Wv5lxIP7vSCVLxSv0GMnV8FrB-2n_q6A68NAKH3nddM) - Don’t create separate monthly bills, invoices, or journals for the same payment. Once you register the line item, Deferrals posts the monthly entries for you. - For example, for a 12-month insurance policy worth PHP 120,000: - Create one bill for PHP 120,000, with the line item in your prepaid expenses account. - Register the line item as a deferral. - Juan then posts PHP 10,000 to your insurance expense each month. - The line item appears under Eligible when: - Its account is set up in Manage Accounts - Its bill, invoice, or journal is approved. You don’t need to pay it first. - It isn’t already on a deferral, including a draft deferral - You can also create a transaction from bank reconciliation. If a line item in that transaction uses a deferral account, the line item appears under Eligible. - A bill or invoice can have line items in different accounts. For example, add a one-time processing fee as a separate line item in an expense account. Only the line items that use a deferral account appear under Eligible. The rest post as usual. - Tip: To track related transactions together, such as all your prepaid expense bills or all your deferred revenue invoices, group them in a [Capsule](https://help.juan.ac/en/articles/9994162-capsules.md). ## Q6. How do I register a deferral? - Go to **Registers → Deferrals → Eligible**, expand the transaction, tick the line item, and click **Register**. - You can also click **Register Deferral → New Deferral** and pick the line item under **Source Entry**. - You can combine several line items into one deferral if they come from the same transaction and use the same deferral account. Their amounts are added together. - The total of the selected line items shows as **Net Amount** at the bottom of the page, and the Register button shows how many you selected. - Line items from another transaction or account can’t be selected with them. Hover a blocked line item to see the message “Lines must come from the same document and account as your selection.” ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-Qk1xEJQboqhoRZS7UyXfyAs2CSeWaKnwN2eBQCqpMS02rCUP8EaNifz98ROjjOzd7WA2Y2jSQyv.png?v=1&k=a&s=api&e=1793361600&sig=p_8ZsqLWCwVl-SsH1yg5QMcPorZbb5u7aI3wBxWfqjg) - Juan fills in these fields from the line item: - Deferral Account - Document Date - Deferral Value - Deferral Category - Deferral Name - Deferral Reference - Edit the name if the line item description isn’t clear on its own. - Complete the rest of the form: - **Deferral Type**: a label for reporting, such as Insurance or Rent for prepaid expenses, or Subscription or Service for deferred revenue - **Amortization Method**: choose Straight Line to spread the value evenly, or Custom Schedule to set your own monthly amounts - **Amortization Start Date**: the first day of coverage. It defaults to the document date and can’t be earlier. - **Amortization Expense Account** or **Revenue Account**: the account each monthly entry posts to, such as Rent Expense or Subscription Revenue - **Periods (in months)**: the number of months covered, from 1 to 1,200 ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-zmWIRPaWoJTEl1A0QNneOvYVeuxL4sPPkabn8G6jdtJ7Z4LCEIH3smafe9kdpHjgwfUWK0Mhz3w.png?v=1&k=a&s=api&e=1793361600&sig=wTsGP_T55rbR9UqSPYfe8zvheDKvsvMCkmaPczM-Agw) - For deferred revenue, these fields say Recognition instead of Amortization, such as Recognition Start Date. - Before saving, review the schedule preview to check the posting dates and monthly amounts. - Open the arrow next to the button and choose **Save** to activate the deferral, or **Save as Draft** to finish it later. - To finish a draft, open it under **Register → Drafts**, fill in every required field, and click **Convert to Active**. - Internal Notes and Attachments are optional. You can attach up to 10 files of 10 MB each. - For example, say you bill a customer PHP 60,000 on March 1 for a 12-month subscription: - Create one invoice for PHP 60,000, with the line item in your deferred revenue account. - Register the line item as a deferral. - Juan then moves PHP 5,000 to revenue each month, starting March 31. ## Q7. How are the monthly entries calculated and posted? - With Straight Line, each monthly amount is the deferral value divided by the number of periods, rounded to the cent. The last month absorbs any rounding difference. - For example, PHP 2,400 over 7 months posts PHP 342.86 for six months and PHP 342.84 in the last month. - With Custom Schedule, each entry uses the monthly amount you set for that period. - Each entry is dated at the end of its monthly cycle, counted from the start date: - A July 1 start posts on July 31, August 31, and so on. - An August 15 start posts on September 14, October 14, and so on. - Juan schedules every entry when you save. - Reports pick up each entry from its date. A back-dated deferral catches up on past months right away, and future months appear as their dates arrive. - Each entry moves value between two accounts: - **Prepaid expense**: debit the expense account, credit the prepaid account - **Deferred revenue**: debit the deferred revenue account, credit the revenue account - In the deferral’s schedule, entries are labeled Amortization for prepaid expenses and Recognition for deferred revenue. - Entries appear in the ledger with the transaction type Deferral. To view them, click the 3-dot icon on a deferral and choose **See Ledger**. ## Q8. How do I set up a Custom Schedule? - Use Custom Schedule when the amount isn’t spread evenly across the months. For example, a 12-month service contract might charge PHP 5,000 a month for the first 6 months and PHP 6,000 a month after that. - On the deferral form, choose **Custom Schedule** under **Amortization Method**, or **Recognition Method** for deferred revenue. Then click **Click to Set Up**. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-KjrXoU8O1A5GAyQaDEWExo0d0jamwQp8EbtSbkoWkwFB3SmD4Ygo7ruNyf10pNEZjACkFPlzh5f.png?v=1&k=a&s=api&e=1793361600&sig=gWjg6p7rdlcP9ht9qS4H5_2Sw9XyWA9FSxLHokCuuDQ) - For each period, enter the **From** and **To** months and the **Monthly Amount**: - Click **Add Period** to add another date range. - Click the trash icon to remove a period. - The first period starts on the document date. - Custom schedules are set in months. You pick the month and year, not individual days. - The monthly amounts must add up exactly to the deferral value. The status below the periods shows: - **Fully scheduled**: the amounts match the deferral value, and you can save - **Short or over**: the amount still missing or the amount in excess. You can’t save until the schedule is fully scheduled. - The Resolved Timeline shows each period’s dates and total, such as PHP 80.00 × 9 = PHP 720.00. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-LdFQGqe8SOtNYepRed96tPY0H8x8t2OcsMupqt7V2KmCiwhXKFjjUc6OqalPu4mmNMLjz0MIw0t.png?v=1&k=a&s=api&e=1793361600&sig=6KqwZeTLtJJWoFGrNzCl6HPG9khX9pqXOzTVGiyg0PI) - Click **Save**. Open the deferral to see the schedule breakdown. ## Q9. How do I check that my deferrals match my balance sheet? - Go to **Reports → Summaries → Deferrals**. You can also click the download button on the Deferrals register. - **Register**: one row per deferral, grouped by category, with its reference, type, status, start date, and deferral value - **Reconciliation Summary**: for each deferral account, the ledger balance, the register balance, and the difference - A difference usually comes from one of these: - A transaction line item that isn’t registered yet - A manual journal to the deferral account - A closed-out deferral whose remaining value hasn’t been moved yet - Check the Eligible tab first. ## Q10. How do I edit or duplicate a deferral? - To edit, click the 3-dot icon on the deferral and choose **Edit**. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-uMcPVvk3IThje0zhrQq0k90BaGJXxSYnK3wTo6CG0hSNvxlXo5kZnPAKHdhdrHnhtN3QcEqpTSA.png?v=1&k=a&s=api&e=1793361600&sig=6Frn4gr2-gOfUAJX5XvXMFpon5JCYwxgulHvdiLTv4g) - When you change the schedule, such as the periods, Juan recalculates every entry, including ones already posted. Past months in your reports update automatically. - Juan won’t save an edit that changes an entry in a locked period. - To create a similar deferral, click the 3-dot icon and choose **Duplicate**. - The name, method, start date, expense account, and periods are copied. - Pick a new transaction line item and a deferral type. - When a contract renews, follow these steps: - Duplicate the original bill or invoice for the new term, and approve it. - Duplicate the old deferral and pick the new line item. - Set the start date to the first day of the renewed term. - To see the deferral’s change history, click the 3-dot icon and choose **Activity Log**. ## Q11. How do I close out a deferral early? - Use Close Out when a contract ends early, such as a cancelled insurance policy or subscription. - Click the 3-dot icon on the deferral and choose **Close Out**. - Under **Close Out At**, pick the date to stop the schedule. It can’t be earlier than the latest posted entry. - Check the deferral value, the amount amortized or recognized so far, and the remaining value, then click **Close Out**. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-efIRoVI8JYIudiBJ1czu1Fr6OhYhav7B1ShWsFf6XwcUyWEA8srowsaOjRjmcg1lS9c1O97Vcsp.png?v=1&k=a&s=api&e=1793361600&sig=tTkn_FhV7cYNKiasOFwU__Dy8GHI1kmJDWrFZekAIgY) ## Q12. What happens when I close out a deferral? - Entries up to the close-out date stay posted. Every scheduled entry after it is cancelled and removed from your ledger and reports. - Close Out doesn’t post the remaining value. It stays in your deferral account. - If the contract was cancelled or refunded, post a journal to move the remainder: - For prepaid expenses, move it to an expense or a refund receivable. - For deferred revenue, move it to revenue or a refund payable. - You can’t edit a closed-out deferral, so note the reason for the close-out in the journal description. - The deferral’s status changes to Closed Out, and it moves to the **Inactive** tab. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-5wpjJa3m0efKYl7Lmo9IoivRNoZ3u7rmCQuQE0KW4xiOV3fv7KjGgZdb6zjss8lKSiTBInofuxy.png?v=1&k=a&s=api&e=1793361600&sig=4oX3WiiZepO9speXslGnK-gNSq4PxdADtlzYAbK757o) - On a closed-out deferral, the 3-dot menu shows Undo Close Out, Duplicate, and Delete. - To reverse a close-out, choose **Undo Close Out**. The deferral returns to the register, and the cancelled entries come back. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-Qy1PeBa53243cnufFJ5cXcTvJJjLhG3hNXdoOgctPLperpdFmYzrz33COt74NFcTv5Pmay4af7k.png?v=1&k=a&s=api&e=1793361600&sig=mQoKn1EO_Uu1gS0qJZEID9x3sIKIgE4QZsA5mP-CZic) ## Q13. How do I delete a deferral? - Click the 3-dot icon on the deferral, choose **Delete**, then click **Delete** again to confirm. ![](https://files.gleap.io/pf/gattachments/670f5e9990a433836c859b66-jj24FqxGec1yffYHWZL0ju9B0PDxaYIiZCe2w3iViNmxqJW9Vc87pOAswK8DktOu7aD0Pa8x40P.png?v=1&k=a&s=api&e=1793361600&sig=AsF-qXSzPYDFblvLZZPNhK0G3zP2JRHLr_2Fn7dQcQQ) - You can delete active, closed-out, and draft deferrals. - You can’t delete a deferral that has an entry in a locked period. Ask an Admin to move the account’s lock date first. See [Lock Dates (COA)](https://help.juan.ac/en/articles/9577112-lock-dates-coa.md). - Note: To keep the entries already posted, use Close Out instead. ## Q14. What happens when I delete a deferral? - Juan removes the deferral and all its monthly entries, including past months. They no longer appear in your ledger or reports. - Deleting can’t be undone, but the transaction line items return to Eligible, so you can register them again. - The bill, invoice, or journal stays as it is, and you can edit the line item’s amount, account, date, and currency again. ## Q15. What happens if I edit, pay, or credit the bill, invoice, or journal? - Before you register a line item, you can edit it freely. If you change its account to one that isn’t a deferral account, it no longer appears under Eligible. - Once a line item is registered, you can’t change its amount, account, date, or currency, and you can’t void the transaction. - You can still edit other fields, and Record Payment stays available. - Credit notes apply to the whole transaction, so they don’t change the deferral. If the contract is cancelled, close out the deferral as well. - To change the amount or deferral account of a registered line item: - Delete the deferral. - Edit the bill, invoice, or journal. - Register the line item again. ## Q16. What amount becomes the deferral value? - The deferral value is the line item amount before VAT. VAT stays on the bill or invoice as usual. - Withholding tax doesn’t reduce the deferral value. It changes how much you pay your supplier, or receive from your customer, not the cost or revenue itself. - For example, take a 12-month rent bill: - Rent: PHP 120,000 - VAT: PHP 14,400 - 5% withholding tax: PHP 6,000 - In this example, you pay the supplier PHP 128,400. The deferral value is still PHP 120,000, which posts PHP 10,000 a month. - For foreign currency transactions, Juan converts the line item amount to your base currency using the transaction’s exchange rate on its transaction date. Every monthly entry uses this converted value, even if exchange rates change later. - For example, a USD 1,200 bill at a rate of 58.00 becomes a PHP 69,600 deferral, or PHP 5,800 a month over 12 months. ## Q17. Can I use Deferrals for prepaid balances I already recorded? - Yes. This works for balances you recorded in Juan before using Deferrals, and for balances you brought in from another system, such as through a Trial Balance transfer. - Create a journal that moves the remaining balance from its current account to a deferral account. - Use a deferral account that’s different from the account the balance sits in now. If the balance is already in the account you want to use for deferrals, create a new deferral account, such as Prepaid Expenses (Deferrals), and move the balance there. - Date the journal on or before the first day of the remaining coverage, since the start date can’t be earlier than the journal date. - Register the journal line item as a deferral, with the remaining months as the periods. - For example, say PHP 60,000 is left on an insurance policy with 6 months remaining: - Create a journal that debits your deferral account and credits the account where the balance sits now. - Register the journal line item for 6 months. - Juan then posts PHP 10,000 each month. ## Q18. How do I import deferrals? - Go to **Registers → Deferrals**, open the arrow next to **Register Deferral**, and click **Import Deferrals**. - Download the template. It’s built for your organization: - The Eligible Lines sheet lists the transaction line items waiting to be registered. - The Data Check sheet lists the allowed types, methods, and accounts. - On the Deferrals sheet, pick a **Source Line**. The document reference, account, category, and amount fill in automatically. Don’t edit them. - Fill in these columns: - Deferral Type - Deferral Name - Deferral Reference - Amortization Start Date - Periods - Amortization Account - Rows with the same Deferral Reference become one deferral. They must share the same settings and come from the same transaction and account. - Upload the file and click **Next**. The review screen shows each deferral to be created, along with the row and column of any errors. Click **Finish**. - Note: Import supports Straight Line only. Set up Custom Schedule deferrals in the deferral form. Each file can have up to 1,000 rows, in .xlsx format up to 5 MB. ## Q19. How is a deferral different from a fixed asset? - **Fixed assets**: physical items you use in your business for more than a year, such as equipment, vehicles, and computers. Their cost is depreciated over their useful life, and you can sell or discard them. - **Deferrals**: payments for a period of time or a service, not a physical item. They cover costs you paid in advance (prepaid expenses) and income you received in advance (deferred revenue). - A quick rule: if you can use, sell, or dispose of it, it’s a fixed asset. If you paid, or were paid, for a period of time, it’s a deferral. - In Juan, the two registers also differ in a few ways: - **Source**: a fixed asset starts from a bill or journal line item that uses a fixed asset account. A deferral starts from a bill, invoice, or journal line item that uses a deferral account. - **Setup**: deferrals need deferral accounts set up first. Fixed assets don’t. - **Ending early**: fixed assets can be closed out, sold, or discarded. Deferrals can only be closed out. - See [Fixed Assets](https://help.juan.ac/en/articles/9575775-fixed-assets.md) for more on fixed assets. ## Q20. What are the current limitations? - Schedules work in whole months. Neither Straight Line nor Custom Schedule prorates by day. - Deferral accounts must use the Current Asset or Current Liability account type. For prepayments longer than 12 months, the full remaining balance stays in the current account. - The start date can’t be earlier than the document date. - Periods must be whole months from 1 to 1,200. - Each transaction line item can be on only one deferral. - Close Out doesn’t post the remaining value. You post a journal for it yourself. - Import supports Straight Line only. - Deferrals are in base currency only.