Deferred Revenue Calculator

Deferred revenue, also called unearned revenue, is money you have been paid but have not yet earned because you still owe the customer service over time. This calculator splits a prepaid contract into the part you have already earned and the part still sitting on the balance sheet as a liability. It does this with simple straight line logic: it takes the total prepaid contract value, works out how many months remain in the term, and multiplies the value by the share of months still to run. Whatever is left has been recognised as revenue. New Zealand SaaS and subscription businesses deal with deferred revenue constantly, because customers who pay annually up front create a large prepaid balance that must be released into revenue month by month rather than all at once. Getting this right matters for accurate reporting, for tax timing, and for understanding how much of your cash is actually obligations to deliver future service. To use the tool, enter the contract value, the total number of months in the term, and the number of months that have already elapsed. The calculator returns the deferred revenue still owed plus the revenue recognised to date. A few tips help. Make sure the months elapsed never exceeds the total term, or the deferred figure will turn negative. Use whole months for clean reporting that matches your accounting periods, and apply this straight line method only where service is delivered evenly, since usage based or milestone contracts need a different pattern. Finally, reconcile the deferred balance with your billings each period so the two metrics stay consistent. Used carefully, this calculator keeps your unearned revenue honest and your reporting clean.

Deferred = value x (months remaining / total months). Estimate only, not financial or tax advice.