Installment Method
The installment method is used to recognize revenue when cash is received in multiple installments over an extended period of time for goods or services delivered.
ChargeOver will align revenue recognition with scheduled payments you create. ChargeOver will recognize revenue on the date of the scheduled date for the amount of the payment.
When to use the installment method
The installment method is typically used when there's an agreement with a buyer to accept payments in periodic installments over a long span of time -- often longer than a year.
The terms of installment sales - such as the payment dates and amounts - are agreed to by the buyer and seller at the time of the sale.
Talk to your accountant or tax advisor!
Your accountant or tax advisor is your best resource for determining how your business should be recognizing revenue.
Example
Let's look at an example for an invoice created on Jul 7, 2025, with 3 scheduled payments.
If you scheduled 3 payments...
- $ 200.00 up-front
- $ 700.00 after 45 days
- $ 300.00 after 90 days
The revenue recognition schedule then looks like this:
| Period | Month | Revenue | Revenue Still Deferred |
|---|---|---|---|
| July | $ 200.00 due Jul 7, 2025 | $ 200.00 | Up-front payment |
| August | $ 700.00 due Aug 21, 2025 | $ 700.00 | Second installment (45 days) |
| September | (no payment due) | (no payment due) | (No payment due in September) |
| October | $ 300.00 due Oct 5, 2025 | $ 300.00 | Third installment (90 days) |
| Total | $ 1,200.00 |