For those of you who incorporated your companies and offer a prepayment/subscription option for your plans. How do you account for the revenues.

Do you acrue for it ie. Allocate portion of the cash received to sales every month

Or do you just recorded to sales when you get cash.

Also what type of accounting software are you using and is there a trick to automate this process in your accounting software.

Thanks :cartman:

Heh I hired an accountant and begged him to "do the right thing". Primary software == PeachTree ... Cash entries as sales has worked better than trying to spread the sale out over the year especially when those sales tend to up/downgrade in the meantime blah blah blah blah...

The accountant was the BEST thing we could have purchased for the company... if you're not 100% sure how to handle the taxes, insurance, payroll, sales, etc etc etc etc and you can swing it...snag an accountant who can work with the company as much as needed. It _will_ save you from quite a few headaches.

Have you hugged your accountant today?
(I do so w/ tears every time he forces me to sign checks away to the IRS)

LOL I am one. Just wanted to get a fell of how others' do it in this industry. :)

Standard accounting would be to collect the payment, post it to short term liability. Then monthly, apply fee for services rendered. PeachTree handles this easily.

Hehe I have Quick books and for the world of me cannot figure out the easy way to do it. Reason being is because we offer several different plans with several different billing cycles. which means I have to allocate certain amount based on the days left in the month this month and carry the rest forward. And of course there are returns where you have to reverse entries from prior billing period.

And I found no easy way to deal with it in Quick books any ideas short of keeping the books at the customer level which becomes a logistical nightmare once you hit certain number of customers.

I don't know anything about Quickbooks. I just know that PeachTree will allow you to admin at the user level with different billing cycles and apply to consolidated accounts. You can set up a memorized JE for payment collection that will make EOM, qtr and yearly adjustments easy.

Hmm that might be an idea thanks :)