Refunds can be completely excluded from the revenue recognition. If you need the invoices to keep being recognized till the end of the billing period and refunds to be subtracted from the revenue right away, Synder can be set up to do this.
Overview:
Refunds are included into the recognition
Let’s consider an example. The customer was invoiced for the yearly plan in August for $1200.
A refund was issued in December for -$1200.
If Synder is set up to include refunds into revenue recognition, the revenue schedule will look like this:
| Period | Billed amount | Recognized revenue | Cumulative revenue | Deferred Revenue balance |
| August | $1200 | $100.00 | $100.00 | $1100 |
| September | $100.00 | $200.00 | $1000 | |
| October | $100.00 | $300.00 | $900 | |
| November | $100.00 | $400.00 | $800 | |
| December | -$1200 | -$400.00 | $0.00 | $0.00 |
| January | $0.00 | $0.00 | ||
| February | $0.00 | $0.00 | ||
| March | $0.00 | $0.00 | ||
| April | $0.00 | $0.00 | ||
| May | $0.00 | $0.00 | ||
| June | $0.00 | $0.00 | ||
| July | $0.00 | $0.00 | ||
| August | $0.00 | $0.00 |
The refund for $1200 will go to the Deferred revenue, the P&L will have the revenue till November, then the negative record for $400 will be posted to the books.
The above option is the preferred method of recognition.
Refunds are excluded into the recognition
Like in the example above, the customer was invoiced for the yearly plan in August for $1200.
A refund was issued in December for -$1200.
If Synder is set up to exclude refunds are excluded from revenue recognition, the revenue schedule will look like this:
| Period | Billed amount | Recognized revenue | Cumulative revenue | Deferred Revenue balance |
| August | $1200 | $100.00 | $100.00 | $1100 |
| September | $100.00 | $200.00 | $1000 | |
| October | $100.00 | $300.00 | $900 | |
| November | $100.00 | $400.00 | $800 | |
| December | $100.00 | $500.00 | $0.00 | |
| January | $100.00 | $600.00 | $0.00 | |
| February | $100.00 | $700.00 | $0.00 | |
| March | $100.00 | $800.00 | $0.00 | |
| April | $100.00 | $900.00 | $0.00 | |
| May | $100.00 | $1000.00 | $0.00 | |
| June | $100.00 | $1100.00 | $0.00 | |
| July | $100.00 | $1200.00 | $0.00 | |
| August | $0.00 | $1200.00 | $0.00 |
Your P&L will have -$1200 in December right away, however the revenue will be recognized in full.
Feel free to choose the setup that best fits your needs!
Reach out to the Synder team via online support chat, phone, or email with any questions you have – we’re always happy to help you!