Revenue Recognition Categary Use

Dear Gurus,
We have 7 different categories to assign to the item category for revenue recognition.
out of them I want to use option "D - used with timebased and billing related revenue recognition". so i want to know the effects
this category.
1) if I use D category can I realize revenue before the post of invoice also or I have to have post the invoice first before the VF44?
As per the description it indicates that I have to post the invoice first. But in case suppose I want to recognized revenue on the time basis only will the same category work?
2) Also I want to know as the service tax is not the part of revenue so at the time of revenue recognition in VF44 we will get the service tax amount included with net value or only net value will be realized?
Please guide me. Thanks in advance.
regards,
Sanjay

Hello Sanjay,
Use of the SAP ERP SD revenue recognition function is subject to a special release restriction see Note 820417.
Please review the Note 1172799 which has the "Best Practices guide" as an attachment, which should answer majority of your queries on Revenue Recognition.
Regards,
Raghavendra YN

Similar Messages

Service Based Revenue Recognition - Prov Account Missing when using WBS

Hi,
I´ve activated RR functionality using service based and aceptance date.
I've followed the intructions from the best practices documents and the notes:
Note 820417 u2013 IMPLEMENTATION GUIDE FOR REVENUE RECOGNITION
Note 1172799 u2013 NEW VERSION OF BEST PRACTICES FOR REVENUE RECOGNITION
Note 678260 CONSTRAINTS
Note 777996 u2013 ACCOUNT SETTINGS FOR REVENUE RECOGNITION PROCESS
Note 779366 u2013 REVENUE RECOGNITION IN THE SD MODULE
Note 1166848 u2013 CUSTOMIZING SETTINGS
Note 782758 u2013 PREREQUISITS FOR USING REVENUE RECOGNITION
Note 835367 - Activating SAP ERP SD revenue recognition
Note 1000830 - Revenue recognition through incoming invoice (third-party
Note 1025066 - Revenue recognition by proof of delivery (POD)
Note 1120297 - Revenue recognition by acceptance date
Note 1125456 - Revenue recognition due to customer-specific event
We are implementing SD, FI (using New Gral Ledger), PS, CO and MM in a company that sells projects. Therefore we're posting everything to the WBS elements.
We need to post the revenue values to the WBS elements too.
The problem is that when we create a sales order for RR indicating a WBS element and try to save it, the system activates the incompletion log saying that the provision account is missing, despite the account is in VKOA.
The strange thing is that if we use a material with profit center (without any WBS or order indication in the sales order) all the revenue recognition process runs perfectly (we save the order, VBREVK is fullfiled, VF44 is run and the invoice is done correctly).
Does anybody know why when using a WBS element in the sales order, SAKN2 field is not fullfiled and the incompletion log is activated???
Is it a program error? Or are we doing something wrong?
Quick responses will be apreciated since we need to move on within two weeks!
Thanks in advance!
María del Valle Pintor.
Moderator: This thread has been locked due to crossposting.
Please do not post the same question in different forums.

sap note 883544

Any BTE/Exit for Block/ Unblock Revenue Recognition using VBREVEu2013REVPOBLCK

Hi Experts,
         I have a requirement to block/unblock SD based Revenue Recognition by changing the value of VBREVEu2013REVPOBLCK in VA02/VA42 through any available user-exit/BTE. On input side I need VBAP and VBREVK structure to give the criteria for blocking and unblocking. Depends on the certain criteria I need to change the value of VBREVEu2013REVPOBLCK to block/unblock.
On analysis I found that there is a similar BTE 00503113 which is having similar interface except, it has VBREVE u2013RRSTA, but I need VBREVEu2013REVPOBLCK as export parameter.
Could you please suggest some BTE/Used exits that may help me for this scenario?
Waiting for your valuable inputs
<removed by moderator>
Edited by: Thomas Zloch on Jun 2, 2011 10:29 PM

Create an implementation in this BADI - BADI_SD_REV_REC_PODEV
In this case you have a changing parameter: rrpodevcust
depending on the condition, you just need to change rrpodevcust-REVPOBLCK to X.
Include the following
    rrpodevcust-vbeln     = iv_salesdoc_number.
    rrpodevcust-posnr     = iv_salesdoc_item.
append rrpodevcust TO ct_rrpodevcust.
check vbreve table and see if it updates the field.

Revenue Recognition using Cost-to-Cost (Percent Spent) method

Hi Dina/Krishna,
Please help me out in understanding the calculation as per costs to cost mapping with the example below.
Contract Value=100,000/- (inclusive of profit)
Profit Margin=25% => so i guess Cost Budget will be 75,000/-
Actual cost is incurred in four different stages:
1: Material delivery to customer=5000/-
2. Work Completion1=20,000/-
3. Work Completion2=10,000/-
4. Work Completion3=40,000/-
Please explain as how stage wise revenue is arrived using the cost-to-cost (percent spent) method. Although, i apply the formula [AC/BC*(BR-ER)]-AR, i am not able to interpret the results....request you humbly to help me out in understanding it. I have been breaking my head since long time to understand this.
This would of great help
Regards,

Thanks Dina/Krishna,
Adding funding to it, i guess the funding would be cost. ie., funding for 75000/-
With that assumption am i right to derive the following revenue schedules which system would generate. Also, please help with the revenue amount that will be generated in the final schedule.
End of phase1: Funding Balance=70,000 Versus Periodic Rev=6666.67=>rev. generated for 6666.67
End of phase2: Funding Balance=45,000 Versus Periodic Rev=26666.67=>rev.generated for 26666.67
End of phase3: Funding Balance=10,000 Versus Periodic Rev=13333.34=>rev. generated for 10,000
End of phase4: Funding Balance=-65,000 Versus Periodic Rev=53333.333=>rev. generated for ?
Regards,

HELP: AR Open Invoices Conversion with Revenue Recognition (Daily Revenue)

Hi,
I need some help on Conversion of AR Open Invoices with Accounting Rules in R12, Here the client wanted to use Daily Revenue Schedule rule,
I am developing Functional Specification Document (CV.040); Need to understand the Assumptions, Approach and Which data needs to be extracted from Legacy System.
Appreciate your reply at the earliest
Thanks
Ravi

Anil,
Thanks for your response, Here are the answers to your questions.
1) The invoices that you want to convert - Do they already have revenue recognition on them?
Ans: Yes they have Revenue Recognition On Them.
2) Are you bringing only Open Invoices? What about Invoices that are closed (paid), but still have unrecognized revenue on them? DO you want to bring them
over? If no, how will be mage the recognition of those invoices?
Ans: We want to bring only Open Invoices. i.e the following scenarios want in Data Extraction
a) Invoice is Fully Paid (REC is Zero) and Unearned is Full Invoice Amount, Revenue is 0
b) Invoice is Partially Paid (REC is Partial) and Unearned is Partial, Revenue is partial
c) Invoice is fully Paid (Rec is Zero) and Unearned is Partial and Revenue is Partial
d) We do not want to bring the invoices with Fully Paid and Fully Recognized, Unearned is Zero
3) What about partially paid invoices? How do you want to bring them in?
Ans: See above scenarios.
4) Do you want to bring in all Invoice details,or just bring in a summary line with the outstanding amount?
we assume only Summary, but if the Invoices with Several Lines and Different Accounting Rules, We may have to bring them too
Appreciate your response; Suggest some possibilties?
Thanks
Ravi

Price Change for Revenue Recognition

Dear experts,
I am using Revenue Recognition of type B with Revenue Recognition before invoicing.
I have an issue/question about the way price changes are treated in the functionality.
The below example is used to describe the issue for your understanding:
1.Pricing master data: $100/EA
2.Price of item in sales order: $100/EA
3.Qty in sales order: 10 EA
4.Delivery & Goods issue: 10 EA
5.Revenue Recognised (VF44) for: $1000
Accounting Entry:
DR Unbilled Accounts Receivable $1000
CR Revenue $1000
6.Change in pricing master data: $120/EA
7.Partial Invoice for: 2 EA @ $120/EA
Accounting Entry:
DR Customer $240
CR Unbilled Accounts Receivable $240
8.Partial Invoice for balance qty: 8 EA @ $120/EA
Accounting Entry:
DR Customer $960
CR Unbilled Accounts Receivable $760
CR Deferred revenue $200
9.Subsequent Revenue Recognition (VF44)
Accounting Entry:
DR Deferred revenue $200
CR Revenue $200
As you can see in the example above, the amount of the price difference is not credited to sales in step 7. From what I have seen so far the additional amount due to price difference gets credited to sales only after the total invoice value for the item exceeds the revenue recognized.
Is there any option to set the system so that the price difference is taken into account for revenue recognition during each invoicing (even
when the invoicing is partial) ?
Thanks in advance for your help.

The price difference will not go to Sales in Step 7. The reason being Revenue Recognition works on the item rather than the amount. Since you have run F-44, the system finds the same in Unbilled Receivables and posts to that account.
For updating the price changes, you have to run VF46 to cancel the original RR entries. In this case, it will just clear of the RR lines if realization has not happened and post a reversal if realization has happened. This txn will also create a new RR line for VF44 which you can process.
Refer Note 820417 Implementation guide for RR. Download the attachments and look into Part2 doc page 13. This explains how to deal with price changes in sales document.
Hope this helps.
Ravi.

Pricing procedure not to bill customer but revenue recognition

I'm looking for guidance on how to setup a pricing procedure conditions. First let me explain the situation. What happens is the customer buys say 2000 software licenses on a sales order. The customer is billed and the customer account is debited and a deferred account is credited. Now the customer activates one of the licenses. The pricing from the sales order is copied to a contract. This contract has a start and end date for the license. Now that license can start to be recognized based on the period of the line item contract dates.. The issue we have is that normally for deferred revenue billing takes places. Problem is customer was already billing on the sales order. Somehow the pricing procure has to credit the deferred account that was posted on the sales order and then credit the revenue recognition account that can be used by transaction VF44.
So on the invoice associated with the sales order Invoice from sales order
Dr Customer $1000
Cr 2370 $1000
The account 2370 is the deferred account. This part is fine.
Now we activate 1 of the licenses.
So the pricing procedure has to do the following with no billing to the custo0mer account Invoice from contract
Dr 2370 $120
Cr 2371 $120
This is the problem part. crediting the deferred account 2370 and then posting into the revenue recognition account 2371
Rev Rec – VF44 for Period1
Dr 2371 $10 Cr 4340 $10 Any ideas would be appreciated

Hi
In SD billing documents customer is always debited or credited based on nature of transaction. For posting in two different G/Ls instead of customer account there is only one possible way which I know. In free goods pricing system can post debit and credit entries to different G/Ls and these G/Ls are controlled through account keys which you assign to condition types in pricing procedure.
Do you have any Idea of free goods pricing and its posting? Explore this and give it a try. I am not sure about this because I didn't test this. You can test and see if it helps.
In this for contract item category you have to use free goods pricing which you set in item category settings in VOV7.
Thank$

Cost of Goods & Revenue Recognition

Dear All,
I have a typical requirement related with the cost of goods sold (COGS) G/L account & the revenue recognition.
Under SAP best practice, the COGS account is updated together with the Inventory account when post goods issue (PGI) is done.
there are 2 scenarios here -
1. Normal Sales - delivery related invoicing. Here the invoice is created immediately after the delivery. So here the revenue & cost recognition matches.
2. Project sales - PS not being used. Just created milestones using milestone billing. Here the invoice is order related with billing plan. So the milestones are
a. 50% after order confirmation.
b. 40% after delivery.
c. 10% after installation & commissioning.
Here the revenue will be generated at three stages & the COGS will be updated after delivery (PGI).
Is there any way we can update the COGS at the time of invoice in standard SAP.....?
With best regards,
Niyaz.

Hi friend,
Pls use T-code OMJJ and OBYC to setting as stop update acct in PGI! I only know the location to impact about it! With update acct in Invoice, I need to verify again for! I will update when I cover it. Hope this help
Best regards,

Not able to delete a delivery after revenue recognition is reversed

Hello Gurus,
We have a situation for certain Sales Order types after creation of Sales Order -> Delivery and PGI, we do revenue recognition. But there was some mistake and delivery needed to be deleted and recreated if needed. So after doing revenue recognition reversal we are reversing the PGI. After this when we try to delete the Delivery ( which would have got deleted if there was no revenue recognition process ) we get the below error.
Is it a problem with the way Revenue recognition is configured or does the standard behave like this. If the Invoice is also present in the above I am able to cancel the Invoice. If you think its a problem with the way Revenue reccognition is configured please advise.
Item 000010 cannot be deleted (revenue recognition status)
Message no. VL896
Diagnosis
The delivery or delivery item cannot be deleted.
System response
The document cannot be deleted since the delivery contains items that
reference sales document items that are relevant for revenue
recognition. When the goods issue was posted, the system created revenue
lines that had already been recognized. This means that there are
subsequent documents in revenue recognition for this delivery.
Procedure
If you no longer require the delivery or delivery item for deletion, set
the delivery quantities to zero and repost the goods issue. Make sure
that the quantity zero is allowed in Customizing for the delivery item
category. When the goods issue is posted, the overall processing status
is set to C and the delivery can be archived. Message determination
should be configured not to send any messages in this case. To make sure
that the system makes revenue corrections if there are differences
vbetween billed and recognized values, set a billing-relevant rejection
reason in the sales document item if more than one partial delivery is
allowed.
If you still want to use the delivery, adjust the delivery quantities
accordingly. Alternatively, deliver the referencing sales document item
again. Note that the sales document item cannot be delivered again if
only a partial delivery is allowed.
What are the changes I can do to Delete the Delivery?
If I cannot Delete the Delivery, Should I make the Delivery as 0 qty and create a new delivery with changed qty and do further process. Or should I reject the Sales Order and create a new sales order with exact qty and do further process.
Please advise.
Regards,
SNK.
Delivery has one line item. For the above case scenario, invoice is there for some deliveries and for some deliveries there is no invoice. Eg: SO -> DN -> PGI -> Rev Recog -> Iv or SO -> DN -> PGI -> Rev Recog. Requirement was SO was wrongly created as the qty was wrong or in some cases SO needs to be rejected. I am able to cancel Invoice. Rev recog is reversed. PGI is cancelled by VL09. Not able to delete Delivery and I get the above error. Ideally I thought since Rev recog is reversed, Delivery should have been deleted but not happening and above error comes.
SO - Sales Order DN - Delivery IV - Invoice
Edited by: sapconsultnt on Dec 16, 2009 5:06 AM

Hello,
Please review the Note 1224871 which introduced this functionality.
Regards,
Raghavendra YN

Revenue Recognition in Project System

Hello All,
At my current client, they are using the Project System (i.e. WBS) only for Cost and Revenue collection. POC,RA,Milestone billing,Network, Activities are out of scope. Keeping the above thing in mind, I need to know how I do the Revenue recognition thru WBS.
Mu understanding is that If I assign a WBS element on a Sales Order line item, as an account assignment it should collect the Revenue. The only requiremnt should be that WBS should be a billing element and Cost/Revenue profile should carry SD relevant settings. Once the billing is done and invoicing is done, the Revenue should appear against the WBS on running the report S_ALR_87013563/64/65/66.
Please let me know if this will work or do I need to do some more configuration from PS perspective.
Thanks
Sarang

Hi Sarang,
1. Mark WBS as billing element.
2. Assign the sales order line item to the WBS in point 1 or any WBS below that in the hierarchy.
3. Create a billing plan for the sales order line item.
4. The billing plan amount would appear as planned revenue against the WBS element (provided no credit hold useVKM3 to release).
5. Once the line item has been billed ie. Billing document has been created using VF01 or VF04, the Actual revenue would appear against the WBS element.
In terms of Config:
Creat a planning profile that allows Automatic Revenue planning form Sales Order (tcode: OPSB)
Ensure that the planning profile is attached to your project profile (Controlling tab) (tcode:OPSA).
Please let me know if this helps.
jibat
Edited by: Jibat Sankar De Sarkar on Jan 21, 2009 2:49 PM

UNBILLED RECIEVABLE ACCOUNT- SERVICE CONTRACT WITH REVENUE RECOGNITION

Hi SAP Gurus,
I want to draw your kind attention towards my problem:
I have created service contract with one year contract and created an invoice for the whole year in advance.
Now in-between i cancelled a contract (after three months) and want to recognised a revenue for the contract period , so i'm creating a revenue recognition for the three months one by one using transaction code-VF44,
first month revenue recogniton is working fine as first month amount is going from deffered account to revenue account
But for second month instead of deffered account ,system is using unbilled recievable account ,which is wrong .
Can anybody tell me why the system is picking unbilled receivable account instead of deffered account in case of second month revenue recogniton.
This may help us:
"When i was cancelling a contract ,at that time i was entering a billing plan end date in billing plan tab at an item level.
and just after entering end date ,system was creating two lines instead of one in billing plan tab and i think because of that extra line system is picking unbilled receivables in second revenue recognition."
Thanks in advance
Ujjawal
Edited by: Ujjawal Singh Karki on Dec 29, 2010 12:05 PM

Hi,
Thank you for your reply.
I am doing a contract billing for overall period that is for 12 months (contract is of 12 months).
Just after 3 months i have realized that somehow we have to cancel the contract and we canceled that in 3rd month.
I had created the created a contract with periodic billing plan and for canceling that contract i'm putting contract end date in BILLING PLAN TAB as 31/03/2011 (Let say contract is from 01/01/2011 to 31/12/2011).
Can you/anybody please tell me whether is this the correct way of canceling the contract with periodic billing plan?
As per your analysis:
"It seems you have done the billing document for one period and you are doing the RR document for multiple periods and hence the revenue is going to unbilled receivable account for the period for which billing document has not been done"
As i have billed the customer for 12 months but contract was only for 3 months so i'll create RR for only 3 months and for rest of the period (i.e. 9 months) i'll create credit memo and send it to customer.
"Please use a billing type where you will specify only start date and end date of the contract and not the billing plan in contract"
How can we use billing type for contract start and end date .
I think as soon as i'm changing the dates in billing plan tab system is proposing another line item with different billing dates and that is not getting covered under deferred account that is still unbilled amount .
Waiting for your valuable inputs.
In case of any clarification kindly revert to me.
Thanks,
Ujjawal
Edited by: Ujjawal Singh Karki on Jan 20, 2011 11:10 AM

SAP Revenue recognition Credit Memo Accounting document

Hi,
One of our client uses SAP Revenue recognition to post revenue. They have implemented the Service related revenue recognition (revenue recognition category B) and also process credit/debit memo with reference to preceding docuemnt
"F". Each month a debit memo is issued ot the customer for the services performed. Eventually we create credit memos when the customer disputes a particular debit memo invoice. Debit memo and credit memo documents
are created with DP96.
The issue they have currently is with the credit memo account document postings. Client credit memo accounting documents are making postings to unbilled revenue accounts. The postings remain as debit postings in unbilled revenue accounts even after revenue is recognized for an order. According to them accounting rules do not fulfil with the credit memo postings to the unbilled revenue account. Hence we need your expert advice/opinoins.
Please reply as soon as possible because its very high priority issue.
Thanks & Regards
K.R.

Hi,
Please check the reason for value not flowing to the header data of the billing document.Once you get the value of the document tin the header , there will be no issue in creating an accounting document.
Check the item category of the credit memo.
Regards,
Phani Prasad

Revenue recognition job hangs and needs reboot of servers

We are on SAP BPC v7.0 SP6.1, using Microsoft Office 2007 and Internet Explorer 7. We have two environments - Production and QA. Production so far is running fine; QA is on a smaller environment.
I am an application user and load final production files into QA each month. For the past two months when trying to run the revenue recognition job for April 2010 and again for May 2010, the job just hangs where it would normally take about two minutes to complete. Both times it was the only job running at the time, as no one was using the QA environment. I had to terminate the job (which might leave the job running in the background) and have our Server team reboot our two servers (Application and SQL Server Analysis Services). Then the revenue recognition job completes.
Depending if I terminate and resubmit the revenue recognition job, I might get the following detail log message:
Execute formulasError
Failed to commit transaction
1 errors writing data
Send through SendGovenor failed
Last week, our DBA set the QA databases to Simple instead of Full recovery and shrank the transaction log files. I ran a test revenue recognition for July 2010 and the DBA tried to monitor the environment, but he could not see any job committing or any activity on the database. I ended up rebooting our servers to complete the test.
Has anyone experience similar problems and was able to resolve it. Any ideas would be appreciated. Thanks.
Bucky

Hi Sorin Radulescu,
I load the initial billing file using the Import logic script and select the data file and transformation file. I click on the Merge data values option; click No to run default logic; and click No, do not check work status settings. Once the import completes, I run the revenue recognition logic for the accounts and periods I am working with.
I compared our Production transformation file, default logic script (which I am not running), and revenue recognition logic script to QA and they both match. My problem is when I run the exact same revenue recognition job in QA, the job just sits in running status but should finish in a couple of minutes. I would let it run for a couple of hours in QA, then terminate the job and have our two servers rebooted, then the same revenue recognition job runs to completion within a couple of minutes.
I am just wondering if there could be some other setting that does not let the job submission kick off the actual update to the database. To make sure the database was not hosed from the terminated revenue recognition job, I ran a different but smaller job and it completed. Then I would ask for the reboot and resubmit the revenue recognition job and it completes.
I will let our DBA know about monitoring the dllhost.exe for amount of memory used. But the last time he tried to check for any activity on the database he could not see anything, but I do not know if he was checking dllhost.exe or some other files.
Thanks for your response and suggestions. Since this is our QA environment (which I try to keep current with Production), I am trying to see if I can identify the cause and fix it, in case it carryover to our Production environment.
Regards,
Bucky

Revenue Recognition Process in Oracle Projects

I am new to Oracle Projects and needs to understand the Revenue Recognition process.
User has created one Contract under which he has Intercompany Billing, Costing and Elimination Projects. He booked the cost under the Costing project and then ran a custom elimination program to eliminate the intercompany cost. Now he is going to the billing project and running the 'Generate Draft Revenue' program however nothing is getting generated. He wants to know why revenue is not getting recoginised.
Is it the correct way of recognizing the revenue. The Distribution rule being used is Event/Event however no event has got created in the billing project to recognize the revenue.
Please suggest.

Hi ,
The subcontracting process can be exceuted in the following way..
The modules involved will be PA, PO, AP..
This can be handle with the P2P cycle..
Raise a servie PO with the project information in the PO distributions for the service that needs to be subcotracted..
specify the matchig option in the PO Shipments
Enter a receipt (Optional)
Enter a AP invoice and match it with PO or receipt as per the requirement and then run PRC: Interface supplier costs..
this will post the expenditure in the Projects.
In addition to the above i fu have complex PO (with helding some portion of the order amount as retention, advace payment to be provded)
this can be handled through creating the PO through selfsevice PO which accomodates this functionality.l
Thanks
Vijay.

Revenue Recognition in BW

Hi Gurus,
We have a new requirement to perform Revenue Recognition based on custom rules within BW. Have any of you built or worked on such a solution? If yes can you please provide some useful information or documents on it?
Bit more background on this:
As per the requirement, this new solution has to read receipt and refund information from a couple of third party systems. BW will also get the contracts and customer master data. Then based on the contract start and end date and other custom rules, bw acts as a revenue recognition engine and generate and post GL entries to ECC.
Any tips or advises are greatly appreciated.
Regards

Dear Krishna
A tough one. You are making BW a transaction system. My thoughts
* Use an LSA kind of structure for your requirement . (staging DSO to bring in 3rd party details)
* Try to define the logic in the field level routines in the subsequent flow
Once you provide more details like what kind of logic are you going to implement some ideas can be given,
Work on the solution design before you put your hands on the development
Best of luck
Gajesh

Revenue Recognition Categary Use

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