SD Revenue Recognition-SAP Audit

Hey Experts,
I understand that before we could go live with SAP SD Rev Rec functionality, post UAT, we need to present the system with complex scenarios for SAP Audit.Upon their approval only, it is suggested to move the design to production.
Could some one who have gone through such SAP Audit tell me
-->Min / Max duration for the audit
-->Share experiences like expectation from SAP, any corrections suggested post audit by SAP etc
Awaiting for earliest response
Thanks in Advance
Banu

Hello Banu,
The assessment is a free-of-charge service SAP offers to
ensure that mandantory conditions and customizing settings are met.
The prerequisites are reported in note 782758.
Initially you have to fillup the questionnaire which SAP sends.
Once the Activation key is provided, you have to do the testing of the processes in the TEST/DEV system.
Then the test cases have to be provided to SAP for assessment.
SAP then gives you the approval to use revenue recognition in your
PRODUCTIVE system after SAP has reviewed the testing data you provided
and don´t find an error.
This assessment is necessary in order to get future support by SAP
in terms of the revenue recognition functionality.
Please inform SAP at least four weeks before you go live with the
revenue recognition functionality.
Regards,
Raghavendra YN

Similar Messages

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

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,

Revenue Recognition based on User Status of assigned Sales Order line item

Dear Community members,
We have requirement to recognize / de-recognize revenue posted to WBS for calculation of RA, based on the 'User status' of the assigned Sales Order line item.
To elaborate requirement further -
1) WBS Element - XXX - 10 ( with operative indicator - Plan/Bill/Account Assign)
2) Sales Order(SO) Line Items assigned to the above WBS -
- SO No - 123 Line Item 10 - Actual Rev - $ 300 - User Status - EXE (Meaning this work is in progress , partial payment received thus actual revenue for RA at WBS is 'Zero'
- SO No - 124 Line Item 20 - Actual Rev - $ 400 - User Status - COMPL(Meaning this work is Complete , all payment received thus actual revenue for RA at WBS is $400
- SO No - 125 Line Item 10 - Actual Rev - $ 800 - User Status - EXE (Meaning this work is in progress , partial payment received thus actual revenue for RA at WBS is 'Zero'
As per WBS reports Actual Revenue posted to WBS XXX-10 is $ 1500 ( $300$400$800) , however since two SO line items ( SO 123 /line item 10 and SO 125 / line Item 10 ) are NOT having User status 'COMPLETE', the actual revenue posted by those line items $ 1100/- ($300 + 800) should not be included as Actual Revenue for RA at WBS level.
Thus Actual Revenue for RA at WBS XXX-10 should be $ 400 /- ( the revenue posted by SO 124/line item 20 which has user status as 'COMPLETE')
How do above can be achieved?? Is there any standard solution for this?? Is any SAP Note available for this (I too am looking for one but not found any ) ?? do we need any enhancement , Customer exit etc
Thanks in advance
with regards

Hi,
Thanks. You are right that the 'Completed Contract Method' would defer revenue recognition. However, the status checked would be of the RA object (WBS Element in this case, as RA key is on WBS and RA is being calculated on the WBS).
However, our requirement is to check the user status of the Sales Order Line items assigned to the WBS element and filter the revenues posted based on the active user status of individual Sales Order Line item.
Please give you inputs.
Thanks in advance
With regards

How Revenue Recognition value calculate in VF45 for an item

Hello Experts,
I want to know how system calculates Revenue Recognition for any item in VF45. I know the configuration part of Revenue Recognition but want to know the calculation part, how calculation going to find out the vale of the Revenue recognition.
Item net price is 3139255.45 and system calculate Revenue recognition for this item is 3139020.94.
I want to know how calculation going for Revenue recognition.
Can any body help me out ? any link /document related to Revenue Recognition Calculation (not configuration) please share with me.
Thanks,

Hello Prasanth,
For example :- Maintaining an annual Price ZPRC - 1200 and Billing plan is Annual
So, while recognising SAP takes 1200 / 365(Number of days) = 3.287 per day
For jan - 31 days - 31*3.287 =101.91
For feb - 28 days - 28*3.287 = 92.05
Thank you for your time.

Revenue recognition

Hi Gurus,
I require help regarding revenue recognition. I have a scenario where customer pays part amount as advance payment, I have following doubts
1) If I configure revenue recognition at item category, what will be the effect in case of regular payment (non advance)
2) configuration steps for revenue recognition.
regards,
HB

I have a scenario where customer pays part amount as advance payment, I have following doubts
Just search the forum with the text "Down Payment" so that you will get lot of documentation on this topic. Take the inputs and try on your own.
configuration steps for revenue recognition
First and foremost part is you / Client have to get concurrence from SAP to configure.
G. Lakshmipathi

Service based revenue recognition (u0091Bu0092) contract with call off

I am trying to understand Revenue Recognition. I have come across the above term." Contract with call off"
Can anyone tell me what exactly this means.

Dear sap
The contract consists of items defining the individual materials, material groups, or services with prices and in many cases quantities.
An item is assigned to an item category, which defines the type of procurement (e.g. item category K for consignment, or L for subcontracting).
An item of the procurement type "external service" contains a set of service specifications. Such specifications may be hierarchically structured. The summary view of such a hierarchical structure is termed an "outline", and the individual levels of the hierarchy are referred to as "outline levels". Quantities are specified in service lines. Services can be released (<i>ordered, or called off against the contract</i>) at item level or at the level of the service line.
Thanks
G. Lakshmipathi

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

Item Category--Revenue Recognition

Dear All,
system is not allowing me to assign revenue recognition field in VOV7 as it is grey field.
As well when I tried through IMG/S&D/Basic Function/Account assignement/Revenue Recognition Item Category-Change mode system is showing grey field for revenue recognition here also.
Please guide on how can I assign here.
Regards,
Sainath

Hi,
In order for this to work, the revenue recognition functionality has to be activated in the system (because of important financial implications and risks, it isn't activated by default).
You need to raise a message to SAP for this.
Please check OSS note 820417.
Best of luck,
Cosmin

Data Migration of Contracts with periodic billing and revenue recognition

Hello Experts,
I am trying to develop a legacy data migration plan for Contracts with periodic billing plan and revenue recognition.
Example of the scenario is given below:
Customer signed a contract for one year starting 01/01/2009.
Customer is billed quartely, billed in advance.
SAP going live on 04/01/2009
Customer is billed for 3 months and also for initial set up fees.
Revenue recognition is done monthly.
We have to migrate this contract to SAP.
Billing document posting may be necessay as it affects revenue recognition which spans across the total contract period.
Any ideas how to do this?
Thanks A Lot
Anil
Edited by: Anil Jose on Sep 17, 2008 9:38 PM

Hi Anil
How did you manage this? We also had the same problem in one of our contracts and what we did was that we copied the contracts from the legacy with the full value. That is suppose SAP went live on 1st April, 2009 and the contract was created on 1st January 2009 for a value of suppose 100 USD, with the first billing being done on 1st Jan for 33.33 USD for 4 months. We first created the contract with a validity from 1st Jan 2009 in the new system. We billed it with a billing type that we created that did not actually create new accounting entries as the accounting entries had already been created in the legacy system. In the new system then we recognised the revenue till the go live, so that the actual value remaining of the contract reduced. Then we started the billing plan of the contract from 1st of April 2009 for the remaining amount. So next invoice was created on 1st april for 33.33 USD. Can you share your solution.
Regards
Indranill

Revenue recognition in Item category

Dear All
Can you advise what exactly is revenue recognition in item category?.
I need to enter A in the field, but the field is greyed.
Thanks
Deepu Pillai

Dear Deepu,
The Concept of "Revenue Recognition" in Item Category is -
The material, with specified Item Category, is defined for income-accrual or not.
Now, Income-accrual means, say, in a month, you have "n" no. of orders to deliver, but might possible that Invoice and Payment, may get done or may not be.
So, to realise such income for a particular period, we run revenue-recognition (VF44). In VKOA, we maintain "Provisional Account" for such income.
Once invoiced, Accrued income G/L gets debited and Customer G/L gets credited.
[Revenue Recognition|http://help.sap.com/erp2005_ehp_03/helpdata/EN/4d/fcd139f6e4cf2ce10000000a114084/frameset.htm]
As you asked for maintaining - Type "A" in Item Cat., go through
[Time related Rev. reco.|http://help.sap.com/erp2005_ehp_03/helpdata/EN/59/aff23cd85c11d199d60000e8a5bd28/frameset.htm]
Another Type is "B"
[Service related Rev. reco.|http://help.sap.com/erp2005_ehp_03/helpdata/EN/59/aff23fd85c11d199d60000e8a5bd28/frameset.htm]
Best Regards,
Amit
Note: There are few of my posts in threads
Re: Revenue recognition
Re: Revenue recognition design
this will provide some in-sights for rev. recog.

Revenu recognition options grayed up

Hi
We are facing an issue with the SPRO Revenu recognition options which are grayed up, which does not allow to select any values. We have allowed all the authorization etc. but no luck. Follows the procedure to see those option :
TC- SPRO --> SAP Reference IMG --> Sales and Distribution --> Basic Functions -->
Account Assignment/Costing --> Revenue Recognition -->
Click on Set Revenu Recognition For item Categories --> It shows the ItCa and Description column --> I click on change option and then double click any of them (eg. AES in ItCa column --> Click on change and when try to enter the value for any of the Business Data ie. 1) Rev. recognition, 2)Acc. period start, and 3) Revenu Dist (These options are grayed up and does not allow to select any the entry in fact the right check mark is also grayed up.
Any solution would be highly appreciated, as its very urgent in our production system.
Thanks and Regards
Abdul Majid

Hi Majid,
What's your client status ? Is it set to modifiable.
Cheers
Deepanshu

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 in Russia

Hi,
we are rolling out our global SAP solution for Russia and I would like some valuable inputs from SAP Gurus to my query.
My query is regarding revenue recognition in Russia. According to local GAAP, unless a signed copy of the TORG-12 (Act of acceptance of the transfer of goods) is received from the customer, it cannot be considered as revenue for accounting purposes in Russia, whereas for US GAAP purposes revenue can be recognized once the goods have been delivered.
US GAAP is the leading ledger and Russian GAAP is the non leading ledger but it is not possible to release billing to accounting for the leading ledger only.
Another point to note is that Russian accounting is based on actuals and no accruals can be posted for revenues.
Pls. can someone provide me some insight as to how these two requirements were handled together in their projects within SAP.
We are on SAP ECC version 6 ehp4.
Thanks in advance for all your help.
Regards,
Nitin

Dear Deepu,
The Concept of "Revenue Recognition" in Item Category is -
The material, with specified Item Category, is defined for income-accrual or not.
Now, Income-accrual means, say, in a month, you have "n" no. of orders to deliver, but might possible that Invoice and Payment, may get done or may not be.
So, to realise such income for a particular period, we run revenue-recognition (VF44). In VKOA, we maintain "Provisional Account" for such income.
Once invoiced, Accrued income G/L gets debited and Customer G/L gets credited.
[Revenue Recognition|http://help.sap.com/erp2005_ehp_03/helpdata/EN/4d/fcd139f6e4cf2ce10000000a114084/frameset.htm]
As you asked for maintaining - Type "A" in Item Cat., go through
[Time related Rev. reco.|http://help.sap.com/erp2005_ehp_03/helpdata/EN/59/aff23cd85c11d199d60000e8a5bd28/frameset.htm]
Another Type is "B"
[Service related Rev. reco.|http://help.sap.com/erp2005_ehp_03/helpdata/EN/59/aff23fd85c11d199d60000e8a5bd28/frameset.htm]
Best Regards,
Amit
Note: There are few of my posts in threads
Re: Revenue recognition
Re: Revenue recognition design
this will provide some in-sights for rev. recog.

Blocking Periodic Revenue recognition without billing block

Hi All,
I am posting here first time and need some help with Periodic Revenue Recpgnition.
We have scenario where User wants to control the Revenue Recognition based on some contingency flag in Sales Order. If that flag is set then Periodic monthly Rev. Recog should not happen but when user unsets that flag in SO line item then Rev Recog should happen.
I know for Service Based Rev Recog there is a solution SAP provides as Customer Event Type by which we can achieve this without stopping invoicing.
But i am not sure how to block the Rev Recog to occur for Periodic Rev Recog as Customer Event type is not configurable in Item Category with Time-Related Rev Recog (A).
Please suggest some solution on how to achieve this goal with Periodic Rev Recog.
I will give full points for any good suggestion.
Thanks
Ravi

hi
check is there any user exit or BADI available.

SD Revenue Recognition-SAP Audit

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