Deferred Revenue
Deferred Revenue is funds received for services which have not yet been earned. Due to our fiscal year end being June 30th, we do need to take this into consideration. Typically AYSO fall registration opens in the spring before the end of our fiscal year which means Regions begin collecting money for the fall season now but that money cannot be recognized as revenue until the following fiscal year beginning July 1. These funds must be deferred, or put off until the following year.
Revenue and Deferred Revenue may be recorded differently depending on how your Region budgets financial activity as well as the size of your region. Therefore we have provided 3 general options to choose from for recording revenue and deferred revenue.
For Example: New membership year registration is open in the spring, but the season isn't set to begin until fall. Meaning money is collected in spring through summer before June 30th (our year end) and before services are rendered (fall). These funds must be deferred until the next fiscal year for tax reporting.
Option 1 - Record as received
Consider this method if:
- the Region is fairly consistent on player count from year to year and you do not have offer a lot of different programs that would require more complex tracking of revenue and expense by program.
- expenses are fairly consistent from year to year
- This is a good option for smaller regions
Record the entire Sports Connect / Blue Sombrero (BSB) weekly deposit to 4005 Registration Fees (or sub-accounts) in QuickBooks as of the deposit date.
For the purposes of the tax return, the AYSO office will use reporting from Stack Sports to determine the correct amount of deferred revenue that should be reported. Our office will record this entry in our tax consolidation report and not in individual region QuickBooks accounts.
Option 2 - Fall only Region, no spring season
July 1 through February 28 (or when the new Membership Year opens for fall)
Record the entire Sports Connect / Blue Sombrero (BSB) weekly deposit to 4005 Registration Fees in QuickBooks as of the deposit date.
March 1 (or when the new Membership Year is opened for fall) through June 30th
Record the entire Sports Connect / Blue Sombrero (BSB) weekly deposit to 2510 Deferred Registration Fees in QuickBooks as of the deposit date.
- On July 1 of the new year fiscal year, book a journal entry to reclass all deferred revenue to registration revenue.
- Debit 2510 Deferred Revenue (entire balance from the balance sheet to bring it to zero)
- Credit 4005 Registartion Revenue
For the purposes of the tax return, the AYSO office will use reporting from Stack Sports to determine the correct amount of deferred revenue that should be reported. Our office will record this entry in our tax consolidation report and not in individual region QuickBooks accounts. Regions are responsible for booking the journal entry above to recognize the revenue in the appropriate year. This is a change from previous year in NAP Online.
Option 3 - Full weekly Reconciliation
July 1 through end of Winter Registration
Record the entire Sports Connect / Blue Sombrero (BSB) weekly deposit to 4005 Registration Fees in QuickBooks as of the deposit date.
March 1 (or when the new Membership Year is opened for fall) through June 30th
Reconcile weekly deposits in Sports Connect to separate amounts by membership year.
Split the bank transactions in QuickBooks between 4005 Registration Revenue (Spring) and 2510 Deferred Revenue (New Membership Year, Fall)
- On July 1 of the new year fiscal year, book a journal entry to reclass all deferred revenue to registration revenue.
- Debit 2510 Deferred Revenue (entire balance from the balance sheet to bring it to zero)
- Credit 4005 Registartion Revenue
For the purposes of the tax return, the AYSO office will use reporting from Stack Sports to determine the correct amount of deferred revenue that should be reported. Our office will record this entry in our tax consolidation report and not in individual region QuickBooks accounts. Regions are responsible for booking the journal entry above to recognize the revenue in the appropriate year. This is a change from previous year in NAP Online.
Need help to book a journal entry in QuickBooks Online? Watch the below video to learn more.
Link: QB Journal Entry Video
Notes
If you are a region that reports Merchant Fees separately, see Sports Connect Bank Deposit Reconciliation.
Deferred revenue can be reported net of merchant fees. Then on the July 1 entry, recognize the merchant fees as a debit to 8305 Bank & Credit Card Fees. Note that you would need to reconcile the deposit weekly or monthly, and then track total merchant fees from the opening of the new MY until June 30th, because sports connect only allows billing reports to be ran in 4 week increments.
AYSO will account for merchant fees as an organization for tax reporting separately so its not neccessary for Regions to recognize merchant fees. Thus, Regions can recognize registartion revenue net of merchant fees.
