Deferred Billing

DEFINITION of 'Deferred Billing'

The act of charging buyers for their purchases, without interest, at a later date. Deferred billing is most often used as a sales promotion technique, enticing potential customers to purchase big-ticket items now rather than later. Car dealerships and those that operate in the "luxury" markets usually offer deferred billing.

BREAKING DOWN 'Deferred Billing'

From a retailer's standpoint, deferred billing not only increases the buying power of a new or existing customer, it also gives that buyer time to realize they "can't live without" the product purchased. Deferred billing can affect a company's income statement and balance due to revenue recognition differences.

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RELATED FAQS
  1. What are some examples of deferred revenue becoming earned revenue?

    Understand specific examples when a company's deferred revenue is converted to earned revenue, and learn the principles behind ... Read Answer >>
  2. How is a deferred tax asset taxed?

    Find out how the IRS and FASB treat deferred tax assets, which a company can recognize in order to reduce its future tax ... Read Answer >>
  3. How is deferred revenue treated under accrual accounting?

    Learn deferred revenue and its treatment under accrual accounting and why various revenue recognition methods result in different ... Read Answer >>
  4. How does the Fair Accounting Standards Board (FASB) regulate deferred tax liabilities?

    Learn about the treatment of deferred tax liabilities under the requirements set forth by the Financial Accounting Standards ... Read Answer >>
  5. What's the difference between a grace period and a deferment?

    Learn the difference between grace periods and deferments and when each type of delayed-payment period applies to various ... Read Answer >>
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    Understand why deferred revenue is listed as a liability on a company's balance sheet. Learn what is needed to recognize ... Read Answer >>
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