Free calculator

Deferred Revenue Calculator: Roll-Forward, RPO and cRPO for SaaS

Enter what you book each month, the contract term and how you bill. See deferred revenue build up month by month, next to remaining performance obligations (RPO), current RPO and the cash you hold ahead of revenue.

Your contracts

Runs in your browser. Nothing you type is sent anywhere.

$
%
%

Defaults are an illustrative company, not benchmarks. Revenue is recognised evenly over each contract (ACV ÷ 12 a month), the usual treatment for a SaaS subscription under ASC 606. Starts from zero, so it shows how the balances build up; renewals keep the same term and billing.

Deferred revenue at the end
-
RPO (contracted, not yet recognised)
-
cRPO (next 12 months)
-
Unbilled RPO
-
ARR at the end
-
Deferred revenue ÷ ARR
-
Cash billed ahead of revenue
-

Month-by-month roll-forward

MonthOpening deferred+ Billed− RecognisedClosing deferredRPOcRPONew bookings (TCV)Renewals (TCV)

Formulas. Closing deferred revenue = opening + amounts invoiced − revenue recognised. RPO = every contracted dollar not yet recognised, whether invoiced or not; unbilled RPO = RPO − deferred revenue. cRPO = the part of RPO due to be recognised in the next 12 months. Renewals count only once signed, so they are never in RPO ahead of time.

How the calculator works

Every month you sign new contracts worth the ACV you enter, growing by the bookings growth rate. Each contract earns ACV ÷ 12 of revenue in every month of its term, the even (ratable) pattern a SaaS subscription usually follows under ASC 606 because the customer gets the service continuously. The billing setting decides when you invoice: a year at a time, the whole term at signing, a quarter at a time, or monthly. At the end of its term a contract renews at the renewal rate you set, with the same term and billing.

From those schedules the calculator rolls three balances forward. Deferred revenue = everything invoiced minus everything recognised. RPO = everything contracted minus everything recognised, invoiced or not. cRPO = the part of RPO that turns into revenue within 12 months. It starts from zero so you can watch the balances build; if you already have customers, the steady-state ratios are the useful part.

Worked example: the default company

An illustrative company books $20,000 of new ACV in month 1, growing 3% a month, on 1-year contracts billed annually in advance, and 85% of contract value renews.

Default inputs of the calculator above (illustrative). Change any input to run your own numbers.
MonthBilledRecognisedClosing deferred revenueRPOARR
1$20,000$1,667$18,333$18,333$20,000
6$23,185$10,781$92,565$92,565$129,368
12$27,685$23,653$138,408$138,408$283,841
13$45,515$25,780$158,143$158,143$309,356
24$63,004$53,829$314,983$314,983$645,953

Month 1 by hand: one contract with $20,000 ACV is invoiced in full and $1,667 is recognised, so $18,333 sits in deferred revenue. In month 13 the first renewals come in ($17,000), so billings jump from $27,685 to $45,515 while revenue only edges up. By month 24 the company has invoiced $929,794 and recognised $614,811; the difference, $314,983, is 49% of its $645,953 ARR. With 1-year contracts billed in advance, RPO equals deferred revenue: everything contracted has been invoiced.

Same bookings, different billing

Change only the term and the billing, keep the bookings, and revenue moves only a little (2-year contracts reach no renewal inside 24 months, so none of their value is lost to non-renewal), but the balance sheet changes a lot:

Month 24 balances for the same bookings under four contract setups (illustrative).
SetupRevenue, 24 monthsBilled, 24 monthsDeferred revenueRPOUnbilled RPOcRPO
1-year term, billed annually (default)$614,811$929,794$314,983$314,983$0$314,983
2-year term, billed annually$636,626$972,370$335,744$740,433$404,689$543,097
2-year term, billed upfront$636,626$1,377,059$740,433$740,433$0$543,097
1-year term, billed monthly$614,811$614,811$0$314,983$314,983$314,983

Two-year contracts billed one year at a time put the second year in RPO but not in deferred revenue. Billing the whole term upfront moves it into deferred revenue and brings the second year's cash in a year early. Monthly billing leaves no deferred revenue at all, while RPO still shows the commitment. This is why public SaaS companies report RPO and cRPO next to deferred revenue: the revenue recognition guide walks through Salesforce's figures.

Deferred revenue journal entries

For one annual contract worth $12,000, invoiced on January 1 and paid on January 20:

DateEntryDebitCredit
Jan 1, invoiceAccounts receivable / Deferred revenue$12,000$12,000
Jan 20, paymentCash / Accounts receivable$12,000$12,000
Jan 31, month deliveredDeferred revenue / Revenue$1,000$1,000
Feb 28 to Dec 31Deferred revenue / Revenue, each month$1,000$1,000

Whether you record deferred revenue at invoice or only once cash arrives depends on whether the invoice is due and non-cancellable; many startups book it at invoice for annual contracts. Your accountant sets the policy. The roll-forward in the calculator uses invoiced amounts, so it matches the invoice approach. This page explains the mechanics and is not accounting advice.

What to watch in a SaaS company

  • Deferred revenue moves with billing terms, not just sales. A shift to monthly billing shrinks it with no change in bookings, as the table above shows. Read it next to RPO and bookings.
  • It is cash you owe service for. A big annual-prepay quarter fills the bank, then nothing comes from those customers for a year. Forecast collections, not balances.
  • Commissions run the other way. The sales commission on the same contract is usually capitalised and spread over the contract, the asset-side mirror of deferred revenue; see the ASC 340-40 guide.
  • Prepaid usage credits add breakage and expiry rules on top of this; the credit-based pricing guide covers them.

Frequently asked questions

How do you calculate deferred revenue?
Deferred revenue at the end of a period = deferred revenue at the start + amounts invoiced in the period − revenue recognised in the period. For one annual SaaS contract worth $12,000, invoiced on day one and recognised at $1,000 a month, deferred revenue is $11,000 after the first month, $6,000 after six months and zero at the end of the year.
What is the journal entry for deferred revenue?
When you invoice in advance: debit accounts receivable, credit deferred revenue (a liability). When the customer pays: debit cash, credit accounts receivable. Each month as you deliver the service: debit deferred revenue, credit revenue for the month's share. If the customer pays before you invoice, debit cash and credit deferred revenue directly.
Is deferred revenue an asset or a liability?
A liability. You have been paid, or have an unconditional right to be paid, for service you have not delivered yet. ASC 606 calls it a contract liability. It turns into revenue as you deliver.
What is the difference between deferred revenue and RPO?
Deferred revenue counts only what you have already invoiced or collected ahead of delivery. Remaining performance obligations (RPO) count every contracted dollar you have not yet recognised, invoiced or not. A 2-year contract billed one year at a time has two years in RPO but at most one year in deferred revenue. RPO minus deferred revenue is unbilled RPO.
What is cRPO?
Current remaining performance obligations: the part of RPO the company expects to recognise as revenue in the next 12 months. Public SaaS companies report it because it is a cleaner forward indicator than deferred revenue, which moves with billing terms.
Why does deferred revenue drop when we switch customers to monthly billing?
Because less is invoiced ahead of delivery. The contracts and the revenue are the same, so RPO and revenue do not change; only the timing of cash does. That is why a fall in deferred revenue is not, on its own, a sign that sales slowed. Run the billing selector above with the same bookings to see it.
Does deferred revenue count as cash for runway?
The cash is real and sits in the bank, but it is owed service. Customers who prepaid a year are not paying again for twelve months, so a runway forecast built on bank balance alone overstates how long you can last if annual prepayments are front-loaded. Model collections by month, as the 13-week cash flow template does.
Cite this page

Citation

Adlega. "Deferred Revenue Calculator: Roll-Forward, RPO and cRPO." Updated October 22, 2026. https://adlega.com/blog/tools/deferred-revenue/

Link for your article

<a href="https://adlega.com/blog/tools/deferred-revenue/">Deferred Revenue Calculator: Roll-Forward, RPO and cRPO</a> (Adlega, updated October 22, 2026)

Put deferred revenue in your forecast

Adlega models bookings, billing terms and revenue month by month in a 36-month driver-based model, so cash, deferred revenue and runway stay consistent.

Try Adlega free