Setting Up Deferral Templates in Business Central

📘 Introduction:

When businesses incur costs or revenues that span multiple periods, deferrals ensure accurate financial reporting by spreading these amounts over time. Business Central offers a powerful tool called Deferral Templates to automate this allocation. In this blog, we'll walk you through setting up deferral templates to streamline your periodic postings.

✅ What Are Deferral Templates?

  • Predefined schedules to defer revenue or expenses.

  • Used for items, resources, or G/L accounts.

Steps to Set Up a Deferral Template:

Navigate to Deferral Templates

Use the Search icon > Enter Deferral Templates > Select the link.


Click New to create a new template.

Fill in the Template Fields:


Calculation Method (Straight-Line, Equal Per Period, Days Per Period, or User-Defined).

🔹 Straight-Line

Amounts are distributed based on the length of each accounting period.

Longer months receive more deferral amount, shorter ones receive less.

Best for: Realistic monthly expense allocation based on actual period length.

🔹 Equal Per Period

Amounts are evenly divided across all periods.

Period length is ignored; each gets the same value.

Best for: Simplified or flat-fee monthly contracts.

🔹 Days Per Period

Distribution is based on the number of days in each period.

More precise than Straight-Line.

Best for: Scenarios where exact daily costing is important.

🔹 User-Defined

No automatic calculation.

You enter the amount manually for each period on the deferral schedule.

Best for: Full manual control or highly irregular deferral needs.


Start Date Options (Posting Date, Beginning/End of Period, etc.).

🔹Posting Date: Starts deferral on the transaction's posting date.

🔹Beginning of Period: Moves start to the first day of that accounting period.

🔹End of Period: Begins deferral at the end of the posting period.

🔹Beginning of Next Period: Skips current and starts with the next period.

🔹Beginning of Next Calendar Year: Delays deferral to January 1st of the next year.

Period Description Format: To keep deferral postings clear and meaningful, use dynamic placeholders in the Period Desc. field. These tags auto-convert to readable labels during posting.

Placeholder Codes:

CodeMeaning
%1Day number (e.g., 02)
%2Week number (e.g., 06)
%3Month number (e.g., 02)
%4Month name (e.g., February)
%5Accounting period name
%6Fiscal year (e.g., 2022)

Example:

If your Period Desc. is:
Deferred entry - Week %2 of %6

And the posting date is 15/07/2023, then:

  • %2 = Week number → 28

  • %6 = Fiscal year → 2023

🔽 The resulting label will be:

➡️ "Deferred entry - Week 28 of 2023"

In the next part of this blog series, we’ll dive into how to attach deferral templates to G/L accounts, items, and resources, so they can be automatically applied whenever used in general, sales, or purchase journals. This ensures a seamless and error-free deferral process, helping you maintain accuracy and save time during data entry. Stay tuned!


Thanks For Reading...!!


Regards, 

Khushbu Rajvi

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