Deferred Revenue Rollforward Calculator
Bridge billings to recognized revenue by rolling deferred revenue forward for a period.
Billings, cash receipts, and recognized revenue can differ due to timing. Deferred revenue is the bridge: it increases when you bill/collect ahead of delivery and decreases as you recognize revenue.
This calculator models a simple deferred revenue rollforward: ending deferred = beginning deferred + billings - recognized revenue.
Prefer an explanation- Read the guide.
Deferred revenue: bridge billings to recognized revenue (with formulas)Runway and burn: gross vs net burn, working capital, and cash leversDCF valuation: forecast cash flows, discount rate, and terminal valueWACC explained: how to estimate a discount rate for DCF
$
Invoices issued in the period (not necessarily cash collected).
$
$
Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
$300,000.00
- Beginning deferred revenue
- $250,000
- Billings (in period)
- $400,000
- Recognized revenue (in period)
- $350,000
- Period length (months)
- 12
How to calculate
- Enter beginning deferred revenue (start-of-period balance).
- Enter billings in the period (invoices issued).
- Enter recognized revenue for the period.
- Review ending deferred revenue and the change during the period.
Formula
Ending deferred = beginning deferred + billings - recognized revenue
- Billings are invoices issued in the period (simplified).
- Recognized revenue reflects what was earned/delivered in the period.
- Ignores FX effects, write-offs, and detailed revenue recognition policies (simplified).
FAQ
Is deferred revenue the same as cash-
No. Deferred revenue is a balance sheet liability (unearned revenue). Cash is cash. Deferred revenue often increases with annual prepay, but cash and deferred can still differ due to collections timing.
Why does deferred revenue matter for SaaS metrics-
Because it explains timing differences between billings/cash and recognized revenue. It's especially important when customers prepay annually or when billing terms change.
Common mistakes
- Mixing cash receipts with billings (not always the same).
- Using bookings/TCV as billings (bookings can include future-period billing).
- Forgetting that deferred revenue can go negative only in edge cases (check definitions).
How to interpret
How to use the rollforward
- If deferred revenue is growing, billings are outpacing recognized revenue (often prepay or faster sales).
- If deferred revenue is shrinking, you may be recognizing past billings faster than new billings (or billing terms shifted).
- Use alongside bookings/ARR to avoid mixing contracted value with recognized revenue timing.
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Quick checks
- Use consistent time units (monthly vs annual) when entering rates and cash flows.
- Run a sensitivity check on the input that drives the result most (often discount rate or growth).
- Treat the output as a decision aid, not a prediction; validate assumptions with reality.