Deferred revenue

Not always. A refundable deposit against work not yet delivered is generally deferred revenue, while a fully earned non-refundable fee may already count as revenue depending on the contract.

Professional services firms billing retainers, trading companies taking upfront deposits, and any subscription or membership business collecting annual fees in advance.

It can, since Profits Tax generally follows when income is earned rather than when cash is received; your tax treatment is confirmed alongside your accounts, not assumed from the bookkeeping alone.

On the schedule that matches delivery, whether that is evenly over a subscription term or in a lump sum when a milestone completes, so revenue is recognised as it is earned rather than when the cash arrived.

The balance sheet, as a liability, since it represents cash received for work not yet delivered. It only moves to revenue on the profit and loss account once that portion of the work is actually completed.

They often look similar on a bank statement but are tracked differently: a deposit against future work is usually deferred revenue until that work is delivered.

The remaining deferred balance for that contract is adjusted out of the schedule in the month the cancellation is confirmed, with a note explaining the change.

Every deliverable under deferred revenue is reviewed by a senior reviewer before it reaches you. You keep access to the underlying file at every stage, so nothing about the work happens somewhere you cannot see it.

Deferred revenue covers deferred revenue schedule by customer and contract and monthly release calculated against delivery, usage or straight-line terms. The exact scope is agreed and set out in writing before work starts, so you know precisely what is and is not covered before the first deliverable arrives.