How to Use Excel to Calculate Deferred Revenue

By Stephanie Ellen

If you are in business, the chances are you've received income from a customer but haven't yet provided a service. The money for services or items that you have received but have not yet delivered on is deferred revenue. Deferred revenue could be a factor if you are a business that offers prepaid plans of any kind, including yearly contracts, discounts for pay-in-advance or any other service where you have been paid but have not yet delivered a service or item. Microsoft Excel can calculate deferred revenue for your business.

Step 1

Open a blank worksheet in Microsoft Excel, Click the "Office" button and then click "New." Click "Blank Workbook" and then click "Create."

Step 2

Click cell "A1" and then type "Earnings."

Step 3

Click cell "B1" and then type "Prepaid."

Step 4

Click cell "C1" and then type "Percentage of contract left."

Step 5

Click cell "D1" and then type "Deferred income."

Step 6

Click cell "A2" and then type the name of your first customer or income source.

Step 7

Click cell "B2" and then type the amount the customer has paid you for the work. For example, type "$2400."

Step 8

Click cell "C2" and then type the percentage of the contract that is remaining. For example, if you have contracted with a customer to clean its building for 12 months and there are 11 months remaining, the percentage is 11/12 or 0.92.

Click cell "D2" and then type "=b2*c2." Press the "Enter" key to calculate the deferred revenue for the item.

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