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 types of companies tend to have the most deferred revenue?

    Learn what types of companies tend to have the highest levels of deferred revenue. Understand when deferred revenue is recognized ... 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 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 >>
  4. 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 >>
  5. What are the differences between deferred expenses and prepaid expenses?

    Learn the difference between prepaid expense and deferred expense and how businesses use and record each in standard accounting ... Read Answer >>
  6. When capitalizing interest, will interest accrue while you are in a deferment?

    Learn what capitalized interest is. Understand why interest accrues while a person is in a deferment, based on capitalized ... Read Answer >>
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