How to Forecast Deferred Revenue?
Forecasting deferred revenue involves estimating future earnings from payments received in advance for services or products that haven’t been delivered yet. You can start by analyzing past trends in customer contracts, subscription renewals, and service timelines. You also need to consider unexpected cancellations, upgrades, and contract completions to project when revenue will be recognized.
Think of it like a gym membership—customers pay upfront, but the revenue is earned over time as they use the service.
