---
title: How to create Accruals/Deferrals via Revenue Recognition
description: Automate revenue accrual or deferral based on the actual time (hours) spent on jobs.
---

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July 20, 2026

# How to create Accruals/Deferrals via Revenue Recognition

## This guide explains how to automate revenue accrual or deferral based on hours spent on jobs.

### **Step by Step Guide:**

1\. Navigate to **ACCOUNTING \> Revenue Tools \> Revenue Recognition**

![](https://colony-recorder.s3.amazonaws.com/files/2025-12-01/e6c4b21d-75c8-48b2-8ac6-36f792c45970/user_cropped_screenshot_38b9a03008f1476e9ad294898d9c1c9d_text_export.jpeg)

2\. Filter the **To Accounting Year** and **To Accounting Month** to define the point where you want to adjust the amount of revenue recognized. Set additional filters as needed.

![](https://colony-recorder.s3.amazonaws.com/files/2025-12-01/f5b39030-8f15-482a-839a-54cfe55525b2/user_cropped_screenshot_275729f04bff49788884cc0d34298d0e_text_export.jpeg)

3\. Check the **Client** box that you want to adjust the revenue recognition for.

![](https://colony-recorder.s3.amazonaws.com/files/2025-12-01/bbbb6006-3fd6-4e99-a321-1bd367a7fb1e/user_cropped_screenshot_1770d124675a47a8a76c68ea6e651949_text_export.jpeg)

4\. Click **CREATE ACCRUALS/DEFERRALS.**

![](https://colony-recorder.s3.amazonaws.com/files/2025-12-01/b457084a-8d9c-4a33-b00e-89bf37e7add4/user_cropped_screenshot_a1b51074eaf9438d98268fe3e0f388c0_text_export.jpeg)

5\. The **Create Accruals/Deferrals** pop-up box will appear. Check to make sure that the information is correct.

![](https://colony-recorder.s3.amazonaws.com/files/2025-12-01/9cab0595-7585-4641-85cd-8afdeacf4e8a/user_cropped_screenshot_af3839500ddf4c208fc42080b290375f_text_export.jpeg)

6\. Click **OK.**

![](https://colony-recorder.s3.amazonaws.com/files/2025-12-01/82a64617-828f-423b-9564-400e0c45a9f9/user_cropped_screenshot_36aa0fcb31574c42b5566d26cd046d42_text_export.jpeg)

Tip: - Accruals / Deferrals created above will then be reversed into the following accounting month (if you select that option when prompted)

- Based on the value in column **BALANCE TO ACCRUE**, if this is a positive value (the value of billable time on the job is greater than the amount of time recognized as revenue to date), the system will create, in the selected accounting month, a revenue accrual for that amount.
- If the **BALANCE TO ACCRUE** is a negative value, the system will create a revenue deferral for that amount.

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