Synder RevRec: Open Invoices Processing

Synder offers flexible options for processing open invoices in revenue recognition.

If your workflow requires recognizing revenue from open invoices and writing it off as bad debt when an invoice is voided or becomes uncollectible, Synder supports that. Alternatively, if you prefer a simpler approach—recognizing revenue only when invoices are paid—Synder can also handle that.

Both methods are fully supported. Read this article to explore how Synder automates each approach to fit your business needs.

Overview:


Understanding Stripe invoice statuses

Before diving into recognition methods, it’s important to understand the invoice statuses in Stripe, which affect how Synder processes them:

  • Open – A finalized (sent) invoice that has not yet been paid. In Stripe, it may also appear as “Retrying” or “Failed” if payment attempts are unsuccessful. The status may later update to Paid, Voided, or Uncollectible, depending on the outcome.
  • Draft – An invoice that has not been finalized. It can only transition to the Open status.
  • Voided – An invoice that has been canceled and won’t be paid. This status is final and can’t be changed.
  • Uncollectible – An invoice considered unlikely to be paid. It can still be updated to Paid or Voided if the situation changes.
  • Paid – A finalized invoice that has been successfully paid. This status is final and can’t be modified.

Note: Subscription invoices often become “open” when a payment doesn’t go through (insufficient funds, expired card, etc.). Stripe will retry payment several times before the subscription is canceled.

The pause recognition method for open invoices


Synder pauses recognition of any open invoices and doesn’t recognize anything in your books unless the invoice has the Paid/Voided/Uncollectible statuses. Synder recognizes the revenue only after the invoice reaches one of these final statuses, updating prior periods with the appropriate revenue recognition entries.

Example:

Your Stripe subscription has 2 invoices. The first one is a monthly invoice for the Bronze plan, fully paid right away in February. The other one is a yearly invoice for the Large plan that is initiated in March, and remains open till May, when it gets finally paid off.

Recognition flow:

February:

The monthly invoice is fully recognized in February, since the subscription begins on February 1. The recognition calculation is as follows: $199.99/28*28=$199.99

March and further months:
You will get no journal entries available for synchronization unless the invoice is paid off, so your P&L will be empty throughout March and April. The entries will be generated in May but will be backdated and synced as of March 31 and April 30.

Note: Synder will display a message indicating that no revenue recognition entries (journal entries for recognizing revenue) have been generated for the open invoice.

The schedule will still display the expected revenue for your open invoice:

As soon as the invoice is paid off in May, Synder will generate and sync the journal entries for March (dated March 31) and April (dated April 30) and will continue generating monthly journal entries on a regular basis at the end of each month.

Note: You can filter out open invoices and their associated revenue in the overview report to align the figures with your P&L statement, which only includes revenue from synced months. This means that any “pending” months tied to open invoices aren’t yet reflected in your books

The profit and loss statement will appear as follows, reflecting an ongoing annual subscription with revenue recognized only through November:

The balance sheet will appear as follows, reflecting an ongoing annual subscription with revenue recognized only through November:

Backdated and future-dated invoices

Backdated invoices (service start date in the past): If an invoice’s service period starts in a past period, Synder will recognize the corresponding revenue in the current period. This approach ensures timely recognition while still honoring the original service dates.

Example: If a 6-month invoice for $600 is created and paid on August 15, but the service period started on July 15:

  • The revenue for July ($100) is recognized in August
  • Monthly revenue recognition continues as scheduled for the remaining service period

Future-dated invoices (service start date in the future): If an invoice’s service period starts in a future period, Synder will not begin recognizing revenue until that future period begins. The full amount will remain in Deferred Revenue until recognition is appropriate.

Example: If a 6-month invoice for $600 is created and paid on August 15, but the service period started on November 15:

  • The revenue is recognized in November, when the service begins
  • Monthly revenue recognition continues as scheduled for the remaining service period

Setup explained

To set up the app to pause revenue recognition for open invoices, follow the steps below:

1. Make sure the revenue recognition schedule starts on the payment date.

Note: If revenue recognition is enabled through a support team call,  Synder Team will handle the entire setup process and configure the method according to your preferences.

 Note 2: As revenue recognition highly depends on historical data, you won’t be able to change the method later. If you wish to switch methods, you’ll need to restart the setup and syncing process from scratch.

2. If you prefer not to include open invoices in your books, ensure the “Sync open invoices” setting is turned OFF in your Synder settings. With this setting disabled, only paid invoices will be synced.

If you want to track accounts receivable (AR), enable the setting to sync open invoices. If an invoice is voided in Stripe, Synder will automatically reverse it. Uncollectible invoices, however, will remain recorded in your books.

You can learn more about how Synder treats invoice statuses for this method in this guide.

Note: The Bad Debt category isn’t required when using this method.

Important: This setup—using the Payment Date with the “Sync open invoices” setting turned OFF—is the recommended approach for pausing recognition of open invoices.

Enabling “Sync open invoices” while using the Payment Date method may lead to discrepancies between Synder and QuickBooks Online reports and isn’t advised.

Recognize open invoices

Synder treats open invoices as if they are paid for the purposes of revenue recognition.

For example, if a customer’s card has insufficient funds and Stripe continues to retry the charge over several days, the invoice remains open during that time. However, Synder will still recognize the full revenue once the recognition period ends—even if the invoice remains unpaid. In this situation, 2 scenarios are possible:

  • The payment eventually succeeds. Synder will sync the payment automatically to the books and close the invoice. In this case, you get uninterrupted recognition of money in the books.
  • If retrying the charge fails and the Stripe user either voids the invoice or marks it as uncollectible (both are treated the same from a revenue recognition perspective), Synder will automatically sync a credit memo in QuickBooks Online to close the invoice and remove it from your accounts receivable. Any previously recognized revenue will be written off to the Bad Debt account in your profit and loss statement.

Example:

Your Stripe subscription includes two invoices. The first is a fully paid monthly invoice for the Bronze plan. The second is a yearly invoice for the Large plan, issued in April, which remains open until June. In June, it is marked as uncollectible (a voided invoice would have the same accounting implications).


Note: We recommend marking invoices in Stripe as “voided” rather than “uncollectible” because “voided” is the final status of the invoice and won’t cause any discrepancies in the future.

Recognition schedule in Synder RevRec:

March recognition:

The $199.99 monthly subscription spans both March and April. Since it covers 30 days in March, the recognized amount for March is calculated as follows:

$199.99 ÷ 31 (total days in March) × 30 = $193.54

April recognition:

The remaining $6.45 from the monthly invoice is recognized in April, calculated as:

$199.99 – $193.54 = $6.45

The $1,200 yearly invoice is recognized using the daily ratable method. Since 2024 is a leap year with 366 days, and the subscription covers 29 days in April, the recognized amount is:

$1,200 ÷ 366 × 29 = $95.08

May recognition: $1200/366*31 = $101.64

June recognition: $1200/366*30 = $98.36

July recognition:

In July, the open $1,200 yearly invoice is marked as Uncollectible. As a result, all previously recognized revenue related to this invoice must be written off to the Bad Debt account. This includes:

April ($95.08) + May ($101.64) + June ($98.36) = $295.08

This is how the schedule will look:

You will also be able to see that Synder has created a credit memo to close the invoice and delete it from your Accounts Receivable:

The profit and loss report will show the Bronze and Large plan incomes and the Bad Debt:

The balance sheet (deferred revenue) report will go to zero:

Setup explained

To set up the recognition of open invoices, follow the steps below:

1. Make sure the revenue recognition schedule starts on the invoice date.

Note: If revenue recognition is enabled through a support team call, Synder Team will handle the entire setup process and configure the method according to your preferences.
 Note 2: As revenue recognition highly depends on historical data, you won’t be able to change the method later. If you wish to switch methods, you’ll need to restart the setup and syncing process from scratch.

2. Have the setting to “Sync open invoices” ON in your Synder settings.

3. Make sure you’ve selected the right Bad Debt account in the Synder settings category.

Important: This setup—using “Recognize since invoice date” with the “Sync open invoices” setting turned ON—is the recommended approach for recognizing open invoices.

Disabling “Sync open invoices” while using this method may lead to discrepancies in your records and isn’t advised.

Once you have the setup ready, you can check how Synder processes an invoice for you:

1. Find an open/voided/uncollectible invoice in Stripe.

2. Open the invoice and copy the ID of the subscription it relates to.

3. Paste the subscription ID to Synder’s RevRec and find the subscription you need.

Special Cases

Open → Uncollectible → Paid: If an open invoice is initially marked as uncollectible and later gets paid:

  • With the “Pause recognition” method, no revenue is recognized until the invoice is paid. Once payment is received, recognition begins from the payment date.
  • With the “Recognize open invoices” method, revenue is recognized on schedule based on the original invoice. If the invoice is later marked as uncollectible, the recognized amount is written off to Bad Debt. Should the invoice be paid afterward, Synder will sync the payment and automatically adjust the accounting entries accordingly.

Open → Paid: When an open invoice is eventually paid.

  • With the “Payment date” method, no activity is recorded in your books until payment is received. Once paid, Synder syncs both the invoice and the payment, and revenue recognition begins from the payment date onward.
  • With the “Invoice date” method, revenue is recognized starting from the invoice date. When payment is received, it reduces Accounts Receivable but doesn’t affect the recognition schedule.

Open → Voided/Uncollectible: When an open invoice is voided or marked uncollectible.

With the “Payment date” method, nothing is recorded in your books until payment is received, as unpaid invoices are not synchronized.

With the “Invoice date” method,

  • If recognition has already begun, Synder creates a credit memo to close the invoice in accounts receivable and writes off any recognized revenue to Bad Debt. This ensures the Deferred Revenue balance is cleared.
  • If voided/uncollectible in the same month as creation: Credit Memo is created, but no revenue is written off to Bad Debt since recognition hadn’t started yet.
  • For multi-month service periods, only the revenue already recognized is written off to Bad Debt, with accounting entries recorded for each affected period.

Example: A 3-month invoice for $300 ($100/month) is created in August and marked uncollectible in September after one month of recognition:

  • August: $100 is recognized as revenue
  • September: $100 is written off to Bad Debt, and a credit memo is created
  • The remaining $200 in Deferred Revenue is cleared, and no further revenue is recognized

Reach out to Synder Team via online support chat, phone, or email with any questions you have — we’re always happy to help you!

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