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Deferred Revenue across fiscal years

  • 1.  Deferred Revenue across fiscal years

    Posted 17 days ago
    It has been a while since I had to deal with this so I wanted to reach out to the community to make sure we are handling this correctly.

    We have collected program revenue but before the end of the fiscal year we will not meet the milestones to recognize this revenue. We currently have the gifts in the CRM in a deferred revenue fund and a gift date of when the cash was received. My question is how to handle gift entry once we meet the milestones and can realize the revenue. Finance will have the revenue showing up on their reports in the next FY.  Do we update the CRM with the date we realize the revenue? Do we do nothing, and just note on reports why we report different revenue than finance?

    Thanks!

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    Lisa Kirschner

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  • 2.  RE: Deferred Revenue across fiscal years

    Posted 17 days ago
    I am a bit confused.  Program revenue is not something you can count in fundraising totals.  So I am confused about what sort of CRM or accounting treatment you are referring to.  However, if you have received funds that are only available to spend once certain conditions are met, you cannot recognize those funds until those conditions are met.

    In other words, if these were donations, while you might receive and hold them in a holding account, you could not record those as gifts - or issue receipts - until the date the requirements or conditions were met.

    As you are talking about non-gift revenue I would let the accounting office advise on the right entry process.  However, again, as program revenue, these funds are generally not countable as gifts.  Then again, if I am missing something and these are considered gifts, then the above holds.  You would enter them as of the date the funds were irrevocably yours and only then issue a receipt.

    John
    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

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