What is a postponed income?

Delayed income represents payments received for goods and services that were not actually sold or delivered in the same period. The accrual accounting principles require revenue to be recorded at the time of the sale. According to these generally accepted accounting principles, the actual income may not be accepted in the future. There are also cases where preliminary payments are received for services that are commonly referred to as undeserved income. Employers will usually pay payments commission of sales representatives after they actually earned them. For example, sales that have been made in one month may not be paid until the following month. The Company would notice the amount of commissions owed as responsibility and after it is paid, then the amount of her books aligns.

In terms of sales representative, income has already been obtained. It is postponed because it does not receive a payment for the sales activity as it happens. Some companies usually offer some kind of basic salary or warranty that is up to datethat will help balance this delay in payment. Payments of commission are usually postponed because the employer needs time to reconcile and verify the sales invoices that determine the amount of the commission.

hourly employees are usually paid under this type of structure. The hours that worked in the current week usually do not pay until the next to two salary periods. On the other hand, they will usually be paid in the same period.

Companies that provide services and insurance work according to the concept of deferred income. When customers want to make travel reservations with an airline or a subscription for a holiday package, service providers receive payment for services that were not Fulfilled. The amount of payment received for these services is recorded as undeserved income or undeserved income. This represents a responsibility that the company still owes to its customers.

Payments for deferred revenue are recorded as cash payments when they are accepted. It is not officially recognized as income until the services are met. Once and undeserved incomes are harmonized from the Society's books, income is recognized as current.

Insurance is another product in which a postponed income enters the game. Many policyholders are preliminarily valid for coverage for the following month or period. The insurance company is unable to officially recognize premium payments as income until the actual period received. Other examples of companies that usually work under this type of billing structure are cable TVs and some types of wireless phone services.