What is Deferred Revenue?
Deferred Revenue is an optional A2X feature for Shopify that automates the process of deferring and recognizing revenue based on order fulfillment status. Instead of manually exporting unfulfilled orders from Shopify each month and creating journal entries, A2X handles it for you.
When an order is placed but not yet shipped, the revenue from that order should sit in a Deferred Revenue (liability) account rather than being recognized as income. Once the order is fulfilled, the revenue moves from Deferred Revenue to your income accounts. A2X automates this monthly adjustment.
Note: Shopify Deferred Revenue is not the same as Amazon Deferred Transactions, despite the similar name. Deferred Transactions is when Amazon defers, then releases your cash (an asset the moment the sale happens). Deferred Revenue is when revenue is earned, based on fulfillment (a liability until the order ships). They're two separate features that work independently of each other.
Before you start
Before enabling Deferred Revenue in A2X, make sure:
You're on accrual accounting. Deferred revenue is an accrual concept and isn't suitable for cash-basis businesses.
Your Shopify fulfillment data is accurate and up to date. A2X builds its own order-level fulfillment history from the fulfillment events on each order, so it can tell what an order's status was at any past month-end, but it can only be as accurate as the events your store (and any fulfillment apps) record.
You have a Deferred Revenue liability account set up in your accounting system. A2X posts all deferrals and recognitions through a single Deferred Revenue account per marketplace.
Enable Deferred Revenue
Go to Settings > Deferred Revenue in your A2X Shopify account.
When you enable it, you'll be asked to choose a starting month. This is selected as a month (not a specific day), and it's the month from which A2X begins generating Deferred Revenue Adjustments.
A few things to know about the starting month:
Your starting month can be any month that A2X has complete payout history for, but no earlier than June 2025 (if you require an earlier starting month, please reach out to our support team, we're happy to help).
You can change the starting month to an earlier month later. A2X will generate adjustments for the newly included months.
After setting the starting month, A2X fetches fulfillment data and generates the historical adjustments in the background, for large accounts this can take up to 24 hours.
Enabling Auto-posting for Deferred Revenue: you can choose whether A2X automatically posts the monthly Deferred Revenue Adjustment to your accounting system, using the same toggle pattern as auto-posting your regular payouts.
Cost of Goods Sold (COGS): if you have COGS enabled in A2X, we'll generate a COGS Deferred Revenue adjustment for you (similar to typical payouts). The monthly Deferred COGS adjustment posts to the same Cost of Goods Sold and inventory accounts you've already mapped (no separate accounts are needed). It posts automatically when Deferred Revenue auto-posting and your existing COGS auto-posting settings are both enabled.
Note: The Deferred COGS posting uses the costs A2X has on file as of when the adjustment is generated (i.e. the 7th of the following month).
Establish your opening balance
This is the most important step for a clean transition from your manual process (or no previous process) to using A2X for Deferred Revenue.
As of your chosen start date, your Deferred Revenue liability account needs a balance that reflects the orders still unfulfilled at that point. A2X will draw this balance down as those orders are fulfilled, so the balance should be built on the same basis A2X uses, otherwise orders can end up deferred twice, or recognized without ever having been deferred.
Here's how you can use A2X to help establish an opening balance.
How you establish this opening balance is up to you; we recommend working with an accountant.
1. Run A2X's Unfulfilled Orders Report (Reports > Unfulfilled Orders Report) with the as-of date set to the 1st day of the month you've decided to start using A2X to post Deferred Revenue Adjustments going forward.
For example, if you're having A2X post Deferred Revenue Adjustments from May 2026, then set the report as at 1 May 2026. The report lists every order A2X has payout data for that was unfulfilled at that date, with a deferrable amount per order, calculated with the same methodology A2X uses for its monthly adjustments.
Orders from before June 2025 may appear without a deferrable amount (see the FAQs below).
You may use the Exclude cancelled orders toggle to omit cancelled orders from the results and CSV export.
2. Export CSV > Detailed view provides a breakdown of the payout rows related to the unfulfilled orders. Pivoting this data by type can give you the total sum of deferrable amounts by type (product sales, discounts, and so on).
3. Create a manual adjusting journal entry based on these lines. How you create this journal may depend on your current process (this is an accounting decision for you and your accountant or bookkeeper):
If your existing process uses reversing journals (your deferred revenue balance resets at the start of each month), book the full report total: debit Revenue, credit Deferred Revenue liability.
If your existing balance carries forward, you may be able to book only the difference between the report total and your current balance, so you land at the report total without double-counting.
If you're switching from a manual process, a small one-time difference versus your previous balance is expected. A2X's calculation basis may differ slightly from your old method. Once your journal entry has been created:
Do NOT reverse this entry the following month as you normally would. Leave it in place. A2X will clear this entry's deferred amounts as those specific orders get fulfilled.
Stop your manual deferred revenue process. A2X takes it from here.
If you use A2X for Cost of Goods Sold, adjust your COGS and inventory balances to reflect the same set of unfulfilled orders. you're not establishing a separate "Deferred COGS balance". The Unfulfilled Orders Report's detailed export provides the SKUs and quantities.
Map Deferred Revenue account(s)
Once Deferred Revenue is enabled, a new Deferred Revenue transaction type appears on your Accounts and Taxes page. Map it to the Deferred Revenue liability account in your accounting system.
You'll find the new transaction type under the Liabilities section of the Accounts and Taxes page.
The Deferred Revenue line is the balancing side of each adjustment: the revenue side still posts through the income accounts (products, shipping, discounts) you've already mapped, with the offsetting entry posting to your Deferred Revenue account.
If you sell through multiple marketplaces, you'll see a Deferred Revenue line per marketplace. You can map them all to one account, or use separate accounts if you prefer.
If you have automapping enabled, A2X adds the mapping rule for the new transaction type automatically when the feature is enabled. Use this if you'll always map Deferred Revenue to the same liability account, regardless of marketplace.
No tax rate applies to Deferred Revenue lines because A2X doesn't defer tax, so tax rate selection is unavailable for this transaction type.
How A2X Deferred Revenue Adjustments work
Once enabled, A2X generates a Deferred Revenue Adjustment on the 7th of each month, covering the prior month. The adjustment is posted with a date of the last day of the prior month (for example, the March adjustment is generated on April 7 with a posted date of March 31).
Each adjustment includes two types of entries:
Deferrals: for orders still unfulfilled at month-end, A2X moves the revenue from the order's income accounts (products, shipping, and discounts) into the Deferred Revenue liability account. This covers newly placed orders as well as activity on previously deferred orders. If a deferred order is edited, the new lines from the edit are deferred (the original deferral stays in place). If a fulfilled order becomes unfulfilled again, for example, an additional item is added, A2X posts a deferral for the entire order again.
Recognitions: for orders that have now been fulfilled, A2X moves revenue back from Deferred Revenue into your income accounts. This includes orders A2X deferred in a prior month, and orders placed before your starting month that fulfill after it. A2X recognizes these orders even if A2X didn't defer them itself, which is what draws down your opening balance.
Over time, the opening balance you booked manually will be drawn down as A2X recognizes revenue for those pre-existing unfulfilled orders. New deferrals and recognitions will flow through naturally.
Deferred Revenue is posted as a separate monthly adjustment that sits alongside your regular payouts, it doesn't change how payouts post or what they contain.
On multi-currency accounts, A2X generates one adjustment per currency, just as it does for payouts.
What A2X defers (and doesn't)
Only revenue transactions are deferred. Transactions like liabilities and fees are not deferred. See the lists below for details.
Deferred:
Product sales
Shipping
Discounts (except gift card discounts)
Refunds against orders that are still not fully fulfilled at month-end. If the original sale's revenue is sitting in Deferred Revenue, the refund needs to sit there too (see the note below)
Note: Refund deferral applies to manual and order-edit refunds. Refunds processed through your payment gateway are already booked on the payout itself, so they don't flow through Deferred Revenue at all.
NOT deferred:
Shopify fees
Tips
Duties
Gift card sale liabilities and gift card discounts
Disputes
Authorizations, captures, and other platform-level transaction lines that aren't order revenue
Line items that don't require shipping (e.g. change order fees)
Taxes of any kind, including product, shipping, discount, refund, and duty tax
Note: A2X never defers tax, in most jurisdictions, tax is owed to the tax authorities when payment is received, regardless of fulfillment.
Reconciling A2X Deferred Revenue with Shopify
For more information on approaches to reconciling A2X Deferred Revenue with Shopify, see this support article.
Important notes
Fulfillment is at the order level: if an order is partially fulfilled, A2X considers the entire order unfulfilled for deferral purposes, and all of the order's deferrable revenue defers together. One exception: if an already-deferred order is edited in a later month, only the new lines from the edit are deferred that month, the original deferral stays in place.
No deferred revenue balance in A2X: A2X posts the monthly movements only, your General Ledger holds the running balance.
Changing the start date to an earlier month: A2X will automatically backfill the adjustments for the newly included months. This runs in the background and can take up to 24 hours for large accounts.
Payout exclusions are also excluded from Deferred Revenue: Deferred Revenue works off the same payout data as the rest of A2X, so orders from excluded gateways are never deferred.
Orders placed before your A2X Payout History Fetch date: these are outside A2X's visibility entirely. If you have very old unfulfilled orders from before A2X was connected, you'll need to manage those manually (this is an edge case for most users).
Orders cancelled without being refunded (or that will otherwise never fulfill) currently stay deferred indefinitely
FAQs
Can I disable it after enabling?
Yes. Deferred Revenue can be disabled at any time. When you re-enable it, A2X remembers your start date and generates any missing adjustments for the gap period.
Do I need to do anything each month?
No. Once set up, A2X handles the monthly adjustments automatically. You review and post them like your payouts, or enable auto-posting to have A2X post them for you.
What if my Shopify fulfillment data isn't perfect?
A2X builds its fulfillment timeline from the fulfillment events recorded on your Shopify orders. If orders are marked as unfulfilled when they've actually shipped (or vice versa), the deferred revenue calculations will reflect that. We recommend cleaning up fulfillment statuses before enabling the feature.
Why do some orders in the Unfulfilled Orders Report show no deferrable amount?
Orders from before June 2025 appear without a deferrable amount. A2X doesn't hold the underlying order-level revenue detail from before that date, so the amount can't be calculated. A blank isn't a zero: if these orders are material to your opening balance, value them from your own records, or reach out to our support team about earlier data, we're happy to help.