[jarvik]

Let me preface by saying that I'm not a schooled accountant, so terminology may be off.
We have clients contracted to pay for say 1 hour of service per month. If they don't use the full hour, time can be used at a later date.
I will invoice the clients monthly for their contracted amount.
When we receive their payments, I'll apply it to the contract invoice.
Our techs will enter their time into separate invoices for the client.
I will apply credit from contract payments to these invoices and keep track of time available per client.
I'm thinking of keeping two accounts for each customer: one to track the monthly contracted amount and payments, the second to represent actual support time used and money available on account.
Initial thoughts:
The monthly contract invoice would credit a revenue account "Contract" (or "contract clearing" or "contract deposits"), and debit A/R.
The customer's check would credit A/R and debit the bank.
Our technicians' entries of support given would credit a revenue account "Service", and debit ___________ ?
To apply monthly payments to the actual time used, I would debit the revenue account "Contract", and credit ____________?
Is this on the right track?
Any easier way?
Appreciate any help / thoughts...

[CaptainForest]

I have read what you are typing twice and the one thing I can say for certain is that you have lost me.

Try making your explanations simpler, perhaps giving an example.

Here is my interpretation of what you are saying, and if I have interpreted you incorrectly (which is a huge possibility), please correct any errors I have made.

You run a computer programming business where you program client's computer's for them and then charge them.

On Jan 1, they agree to pay you for 4 hours for the month, for which you send them the bill on Jan 31.

You charge them $100 per hour.

On Jan 4, your employees go to their office and work for 3 hours. Your employees report that to you, and you record that 4 hours and say they have 1 hour left of that 4 hours.


Therefore, the JE would be:
On Jan 4 when your employees completed the work.

Dr. AR 300
Cr. Revenue 300

On Jan 31, when they pay you for 4 hours…
Dr. Cash 400
Cr. AR 300
Cr. Unearned Revenue 100

Now let's say on Feb 15, you supply that last hour to them, the JE then would be:
Dr. Unearned Revenue 100
Cr. Revenue 100