Deferred Revenue Waterfall Forecaster

Model SaaS or service contracts by pairing prepaid value, straight-line delivery cadence, and optional go-live milestones to surface recognized revenue to date, the deferred balance, and the cadence required for the remaining months.

Total prepaid contract amount collected at signing, including implementation or onboarding fees.
Length of the service delivery window in whole months (enter 12 for an annual contract, 18 for multi-year phases).
Number of months of service already delivered under ASC 606/IFRS 15 performance obligations.
Portion of contract recognized at go-live or acceptance. Leave 0 for straight-line revenue recognition.
Defaults to month 1. Set the month in which milestone revenue should trigger (cannot exceed the contract term).

Revenue recognition should follow ASC 606 or IFRS 15 policies approved by your auditors. Use this tool for planning only and validate outputs with your accounting team.

Examples

  • Example 1 — $120,000.00 contract, 12-month term, 3 months delivered, 0% milestone ⇒ Revenue recognized to date: $30,000.00 USD • Deferred revenue remaining: $90,000.00 USD • Average recognition per remaining month: $10,000.00 USD • Percent recognized: 25.00%
  • Example 2 — $240,000.00 contract, 18-month term, 6 months delivered, 20% milestone in month 1 ⇒ Revenue recognized to date: $112,000.00 USD • Deferred revenue remaining: $128,000.00 USD • Average recognition per remaining month: $10,666.67 USD • Percent recognized: 46.67%

FAQ

How do I model multiple milestones?

Use the milestone percentage for the primary go-live event, then rerun the calculator with updated inputs to layer additional phase releases if needed.

What if the milestone happens mid-term?

Set the milestone month to the month in which the implementation completes. The milestone revenue is added only once elapsed months meet or exceed that value.

Can I handle renewals or expansions?

Run a separate scenario for each renewal or expansion contract so you can sum the recognized revenue across active agreements in your waterfall.

Does the tool support partial month delivery?

Round partial months according to your revenue recognition policy, then input the whole number of months delivered to stay aligned with GAAP timing.

Can I show revenue allocated to different product bundles?

Allocate the contract price between bundles outside the tool, then run separate calculations for each performance obligation to create a consolidated view.

Additional Information

  • Milestone recognition lets you accelerate a fixed percentage of revenue once the specified month is reached, while the remainder is spread evenly across the term.
  • Straight-line revenue is calculated on the remaining contract value after removing any milestone portion so you do not double count revenue.
  • Deferred revenue equals prepaid cash minus the revenue recognized to date and represents the liability on your balance sheet.
  • Average recognition per remaining month shows the cadence required to exhaust the deferred balance before the contract expires.
  • Percent recognized highlights how far through the contract you are in revenue terms, even when billing was completed up front.
  • Outputs assume a single performance obligation; layer multiple obligations by running separate scenarios and summing the results.

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