About Scheduled Transactions

Several features in Aptify generate Scheduled transactions, such as Foreign Currency Mark-to-Market transactions and Donor Advised Fund Allocations, but they are most commonly used with deferred revenue, since they are used to create adjusting entries when deferred revenue is tracked for an order created in the Aptify Order Entry system. When the scheduled transaction group for the order that includes a deferred revenue product is expanded, entries are created over a period of time based on how that product was configured.

Using the example described in About Deferred Revenue, an order was placed for a monthly subscription product with a yearly cost of $48. When the order is first created, the Accounts Receivable account is debited and the Deferred Revenue account is credited for the full payment.

Then, once the scheduled transaction group is expanded, the Deferred Revenue account is debited $4 each month during the course of the subscription, to account for each portion of that payment earned over time. These post-dated debiting entries to the Deferred Revenue account are called "adjusting entries", as they set up a schedule of adjustments to that account over the course of the subscription ordered. Below is a simplified example of the use of Scheduled Transactions.

When a customer orders a 12-month subscription with a price of $24, the system creates the following general ledger (GL) entry for the order: 

The system also creates a Scheduled Transaction Group that expands to 12 individual Scheduled Transactions records. Each record corresponds to one month of the subscription time period and recognizes 1/12 of the revenue generated by the sale of the subscription product. 

After the first month's entry has been batched to the accounting system, the deferred income account will have a $22 credit balance. This balance represents the obligation to fulfill the remaining subscription issues over the next 11 months. As each month passes, the Deferred Revenue account is debited another $2, until the course of the subscription is completely fulfilled.