Deferred revenue
Deferred revenue is money received from customers for services not yet delivered, recorded as a liability on the balance sheet.
Deferred revenue (also called unearned revenue) represents cash collected from customers for products or services that have not yet been delivered. It is recorded as a liability until the service is performed and revenue is recognized.
Example: A customer pays $12,000 upfront for an annual SaaS subscription. The company records $12,000 as deferred revenue and recognizes $1,000 per month as the service is delivered.
