Deferred revenue
Cash received for work you have not delivered yet.
Last reviewed 12 September 2026
An annual plan paid upfront is cash today and a liability until the service is delivered month by month.
Treating deferred revenue as profit is one of the most common ways small companies overspend.
Frequently asked
What is deferred revenue?+
Cash received for work you have not delivered yet. An annual plan paid upfront is cash today and a liability until the service is delivered month by month. Treating deferred revenue as profit is one of the most common ways small companies overspend.
Why does deferred revenue matter for founders?+
Treating deferred revenue as profit is one of the most common ways small companies overspend.
Related terms
Accrual accounting
Recording revenue and costs when they are earned or incurred, not when cash moves.
Cash flow
The money that actually moved in and out of your bank account over a period.
Balance sheet
A snapshot of what you own, what you owe, and what is left over.
MRR (monthly recurring revenue)
Predictable subscription revenue normalised to a monthly figure.
See this number in your own business
One source of truth, one dashboard, first version on sample data in 48 hours.