how can i prepare invoice for 2026 billed in 2025 - advanced for locators to pay in advance to get discount - unearned revenue of 2025. but realized in 2026

You'll need to bill the invoice using a product or service item linked to a liability account, then clear that liability into your actual income account using a journal entry in 2026. Before proceeding, I recommend consulting an accounting professional to ensure your books stay balanced and audit-ready.

First, go to your Chart of accounts and create an Other Current Liability account (ex., Unearned Dues Revenue) alongside your standard income account. Next, navigate to Products and services and set up a new item (such as 2026 Dues Deferred). The key trick here is to link this item's account field directly to your newly created liability account instead of an income account. You'll also need a separate discount service item mapped to a discount expense or income account.  

Second, create an invoice dated in 2025 using the item you initially created for the full dues amount on the first line. On the second line, add the discount item as a negative amount to subtract it. When the locator pays this invoice in 2025, receive the payment as usual. Afterward, create a journal entry dated in 2026 to recognize the revenue using the following setup:

• Debit: Your Liability Account - this clears out the deferred liability.
• Credit: Your Income Account - this officially records the revenue in 2026.

If you have additional questions, don't hesitate to drop a comment below.