Finance glossary

Credit memo
Deferral
Draft invoice
GL code (general ledger code)
Installment
Pro forma
Receivables
Recurring item
SKU
Unapplied payment

Credit memo

A credit memo is a negative charge applied to a contact's account to reduce an outstanding balance. Credit memos can be created manually in the Cash Receipts module or generated automatically when an invoice is voided. They can be used to satisfy a future invoice or refunded back to the contact.

Deferral

A deferral is an accounting mechanism that spreads the recognition of revenue across a defined schedule rather than recognizing it all at once upon payment. In Freedom, deferrals are commonly used for memberships, programs, or subscriptions where the benefit is delivered over time. Deferral automations can be configured per SKU.

Draft invoice

A draft invoice is a pending invoice that has been generated but not yet finalized or sent to the contact. Draft invoices are commonly used in membership dues renewals to allow review and adjustment before billing is processed. A draft invoice does not affect a contact's balance until it is posted.

GL code (general ledger code)

A GL code, or general ledger code, is an accounting identifier assigned to revenue or expense categories in Freedom. GL codes allow transactions to be mapped to the correct accounts in your organization's chart of accounts, supporting accurate financial reporting and reconciliation.

Installment

An installment is a scheduled partial payment that allows a contact to pay a balance over multiple due dates rather than in a single lump sum. Installment plans can be configured per program or billing item in Advanced Finance. Each installment has its own due date, amount, and payment method.

Pro forma

A pro forma invoice is a preliminary invoice issued before a transaction is finalized. In Freedom, pro forma invoices may include optional line items that allow the contact or administrator to confirm or adjust charges before payment is collected. Pro forma invoices do not constitute a completed financial transaction.

Receivables

Receivables (accounts receivable) refers to outstanding balances owed to your organization by contacts. In Freedom, the Receivables section of the Finance module allows you to generate statements, view aging balances, and send finance statements directly to contacts.

Recurring item

A recurring item is a billing entry set to automatically charge a contact on a defined schedule (e.g., monthly, annually). Recurring items are commonly used for membership dues, subscriptions, or installment plans. They can be managed, updated, or paused in the Advanced Finance module.

SKU

A SKU (stock keeping unit) is a unique identifier assigned to a product or service in Freedom. SKUs are used across modules â€” including Events, Membership Dues, Vouchers, and Commerce â€” to define pricing, GL code assignments, deferral rules, and recurring billing behavior. Every billable item in Freedom is tied to a SKU.

Unapplied payment

An unapplied payment is a credit balance on a contact's account that has not yet been applied to a specific invoice. Unapplied payments are created when an invoice is voided after payment, or when a manual credit is added. They can be applied to open invoices or refunded to the contact.