Service-related revenue recognition

Hi Experts,
When post VF44 for a contract with Service-related revenue recognition (revenue recognition category B) get the message below. No RR FI document posted too.
<<Document for SD reference number u2018delivery orderu2019 does not exist
Message no. JHE019
DiagnosisDocument for SD reference number &1 does not exist. If accounting documents for revenue recognition have been created at collective processing level, you cannot navigate in the original document.>>
Any advise.
Cheers.

hi,
please check in scribd these is a link related to RR.
or
please check in forums on the same.
regards,
balaia

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SD Time/Sevice related Revenue Recognition

Hi
Has anyone switched to a time/service related revenue recognition method from the standrd billing method? we are looking at switching and I wanted to know of anyones experience and problems you came across during your change, did you create new item categories or just update the existing categories(this is what we are thinking of doing). How did you handle open Sales orders which are using the standard method etc...
thanks
Joe

Dear Joe
Please go through the OSS NOte
779365 - Best Practice document for revenue recognition
Or Seach Google below
1- Search Revenue Recognition Processing (474)
2- SAP R/3 SD REVENUE RECOGNITION -
BEST PRACTICE
Knowledge Document
Version 1.4
You will find it on Google easily
Thanks and Regards
Asad

Accrual run and revenue recog( time related revenue recognition)

Hi All,
Please let me know what are the configuration steps required to perform accrual run and revenue recog( time related revenue recognition) in R/3 when we do billing in CRM , for service contracts with start date and end date and billing plan - quarterly in advance
Required scenario:
Contract creation in Crm
Billing in CRM
Accrual Run in R/3
Revenue Recognition in R/3
can we do with the help of result analysis key and internal order .
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thanks
SK
Moderator: Thread locked due to cross posting.

Hi
Please refer the below mentioned link
http://fuller.mit.edu/sb_support/media_lab/deferred_revenue_recog.htm
http://sap.ittoolbox.com/groups/technical-functional/sap-log-sd/intercompany-revenue-recognition-process-3042637
It may help you
Regards
Praveen P C
Edited by: Praveen Chirakkel on May 18, 2011 9:13 AM

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 (ordered, or called off against the contract) at item level or at the level of the service line.
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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

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

What is the Revenue recognition process ?

Hello Experts,
Could you explain the concept of "Revenue recognition" and what is the use of this process.
Thanks and Regards

Hi
Revenue recognition controls the posting period in which revenues are entered and their value.
Revenue recognition means that revenues can be posted in FI independently from the billing document (which normally posts to revenue accounts). This means that revenues can be posted before, during or after billing or a value that has already been billed can be distributed between various periods.
Revenues can be posted periodically or on the basis of specific events:
Standard revenue recognition means that the billing document posts directly to a revenue account. This posting is made without involving the Accrual Engine, i.e. without a revenue recognition process.
Periodic (time-related) revenue recognition means that the revenue from a sale is distributed and posted equally across the entire contract validity period. Billing posts to an accruals account here and revenues are first transfer posted to the revenue accounts in a second step.
Service-related revenue recognition means that the revenue is recognized as the result of an event such as a confirmation or a delivery. Billing also posts to an accruals account here and revenues are first transfer posted to the revenue accounts in a second step.
to know the integration with ECC click on this
http://help.sap.com/saphelp_crm60/helpdata/en/45/f004d98b8f3481e10000000a1553f6/frameset.htm
Reward if helps
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Manohar

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.
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Raghavendra YN

SD Revenue Recognition-Account settings for deferring COGS

Hi Experts
In the current process, COGS, cost of goods sold is getting posted into the COGS G/L account, while creation of billing document.
In VF44 transaction, we find option for VPRS cost being captured against every line item & are available for posting along with revenue line.
In that case, if we have to defer the COGS while creating the billing document & would recogonize it while running VF44 alone with the revenue lines, could you suggest me the account setting to be done for the same?
Anticipating earliest responses
Thanks
Banu

hi
820417 - Implementation Guide for Revenue Recognition
779365 - Best Practice document for revenue recognition
REVENUE RECOGNITION
In revenue recog. you can create your billing documents and they will be passed to accountings.But in this case your customer account would be debited and deferred accounts would be credited.
The purpose of revenue recognition is that you can post all the revenues from a deferred account to sales revenue account for a particular period together for all the docs. through transaction VF44.
if you can se your sales docs no. in VF44,then your revenue recognition is successful.Press on collective processing inside VF44 for posting the revenues from deffered acc to sales revenue account.
Configuration part includes the setting of revenue recog. in item category by following the path sd-basic functionsaccount assnmnt/costingrevenue recog.
Then you have to assign G/L accounts.In the first column of assigning g/l accounts ,enter your sales revenue account and in the second column enter deferred revenue accounts.Deferred revenue account is a spcl g/l account.
Don't forget to enter reconcilliation account in your customer master as well.
It may happen that in revenue recog item categories fields may greyed out but you have to get authorization for your id from a basis guy.
:The point at which revenue (income) is credited to a revenue account in General Ledger. There are three possible types
Time-based : Revenue is recognized in equal proportions between specific start and end dates based on the number of posting periods defined at the company level. Revenue recognition for time-based documents can occur before, during, or after the invoice process.
Performance-based : Revenue is recognized based on the occurrence of certain events such as goods issue or the performance of a service. Revenue recognition for performance-based documents can occur before, during, or after the invoice process.
Standard : Revenue is recognized at time of invoice:
The specified item was not found.
Re: Revenue Recognition
CONTRACTS
Lets take standard CQ contract type:
First maintain customer - material info record in VD51 T-code
Secondly maintain pricing for customer / material or only material combination in VK31 / VK11 T-code
Then use VA41 T-code to create a contract
VA42 to change contract
VA43 to display / view contract
In VA41, enter the document type CQ, followed by the sales area details,
Enter Sold to party.
Enter PO number
Enter PO Date
Enter Validitiy from Date
Enter Validity to Date
Enter Material
Enter Quantity say 999,999,999 or any other higher quantity as it is referred again and agaain
Hit Enter.
Save.
regards
balajia

Revenue Recognition :- Type A : Time Based Revenue Recognition in Contract

Hello,
I am facing a peculiar problem while creating the contract relevant for Revenue Recognition Type A : Time Based Revenue Recognition in Contract.
The Item category setting I am using is as follows:-
1.     Rev. recognition : A : Time-related revenue recognition
2.     Acc. period start : B : Proposal based on billing plan start date
3.     Revenue Dist. : A : Total Val.: Linear and Correction Value Linearly Distributed
I have already done the necessary activation of Revenue Recognition.
Done the account determination for following :-
1.     Revenue account determination (VKOA)
2.     Deferred revenue (VKOA)
3.     Unbilled receivables (OVUR)
Still when I am trying to save the contract the document goes into Incompletion asking for "GL account for item 10"
Where as in account determination analysis the system has already showing the
1.     Revenue account
2.     Deferred revenue account
Kindly guide further.
Thanks & Regards,
Amrish Purohit

Hi
you can overcome this issue of G/l account missing while saving the document is by assigning the Account key of that condition type in
img-> sales and Disrtibution->account assignment /Costing->revenue account determination-->defina and assign account keys
here you have to assign the account keys you are using for that condition type in pricing procedure against the same conditiontype in the accurals field.
this will solve your problem

Service Contract Revenue as Marketing Metric

Has anyone built a metric based on the revenue from Service Contracts as opposed to Sales Orders?
If you would share your approach, I'd be grateful.
Thanks much!

>
Paul Clarence wrote:
> Hi all,
>
> Would be grateful for any advice as to what are the steps that should happen with this type of revenue recognition. I have read through the SAP Help documentation but this really describes just the customizing and not the process.
>
> THanks
> Paul
Hi, Paul!
In CR700 materials there is the next explanation: "Service-based revenue recognition (value/quantity contracts with a target quantity) means that the revenue is realized based on an event. Events are releases that are reflected as service orders or service confirmations. Once again, the billing document is posted to an accruals account first and the revenues are transferred to the revenue accounts in a second step."
Hope it helps
wbr
Vladimir

Revenue Recognition with RA on Service Contracts

We have configured SD Revenue Recognition function (ECC 5.0). We have warranty maintenance contracts running. On this basis we have the following scenario and issue.
The warranty maintenance contracts are created without a billing plan (Reqmt. type SE so that we can settle costs later). The value of which is transferred to Deferred Revenue Account and is recognised at the end of the contract period (As it bears the retention money with the customer). Until this step things are working fine. We use VF44 to recognise revenues.
However, there are costs incurred (both material & labour) in relation to such contracts. To track this, we create a Service Order s against the Service Contract for each month. Later on fulfillment, the orders are settled to the Service Contract. This is reflecting in the Service Order. But the finance team wants to recognise the revenues to the extent of costs incurred. I'm not sure how we can do this. The following is an example scenario.
Contract Value : $1000
Contract period : 1 yr (1.1.2010 to 31.12.2010)
Contract billed at the start of the year on 1.1.2010 so the amount is moved to Revenue Provision (Deferred Revenue)
At the end of the year $1000 lying in Deferred Revenue will be moved to Revenue Account through Revenue Recognition (VF44)
Now, costs incurred as follows which are booked in separate service orders against the contract and on completion, settled to the contract. There is no definite schedule for these costs.
Apr 2010 : $100
Jun 2010 : $200
Sep 2010 : $500
Now, the finance team wants to recognise revenue to this extent during the relevant periods. For eg.
Apr 2010 :
Deferred Revenue A/c $100
To Revenue A/c $100
Jun 2010 :
Deferred Revenue A/c $200
To Revenue A/c $200
Sep 2010 :
Deferred Revenue A/c $500
To Revenue A/c $500
And at the end of Dec 2010 :
Deferred Revenue A/c $200
To Revenue A/c $200
(for the remaining amount)
Can anyone guide me how this can be achieved? Can I do it by running RA on Service Contracts?
Thanks in advance.
Ravi.

One option:
This is how we do it in my company. This scenario is of committed services where biling is based on bill plan but revenue is as incurred. So you will bill 100% in advance to have a deferred position but evey month you calculate the service delivered/incurred and recognize the revenue reference to that service. You have to deliver the equivalent hours (To match the amount you want to recognize) and the VF44 based on delivery document. You might have to adjust your ETC based on the amount you want to recognize every month and the total qyantity to deliver.
In summary, basically you use following steps:
1. Sales order with delivery related item category (Assigned to service contract, in my case we use WBS).
2. VF04 for billing as per plan
3. VL01N to deliver the quantity matching the amount
4. VF44 with reference to delivery.
Item category has revenue recognition 'B'.
Hope it gives some idea.
Thanks.
Rahul

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

Revenue Recognition Analytic xApp misses standard BAPIs / Services

We have an opportunity to develop a SAP xApp Analytics for Revenue Recognition. This xApp is especially interesting for companies in the High tech, Software industry. One of the problems we are facing is that some of the BAPIs which connect to the ERP system are not in the SAP standard offering. Does anyone have experience or developed BAPIs / Services in the following area:
Name: REVREC_01
Functional Description: BAPI enable transaction VF45 (rather than BAPI enable direct table read) - In this way we maintain the same KPI presentation logic as in ERP.
Inputs: As for VF45 input, but Sales Doc must not be mandatory entry. Additional Input fields required such as Sales Org, Product Category, Material (All mutiple values) - Sold To Party must also be mutiple value input.
Outputs: As for VF45 Control Lines output and Revenues and Billing Docs (by Period) Output. In addition for both outputs we would require output by Sales Org, Product Category, Material and Employee Responsible. Also require additional KPIs in the Control Lines such as Revenue Recognised MTD and Rev to be Recognised MTD.
Name: REVREC_02
Functional Description: BAPI enable transaction VF44 (rather than BAPI enable direct table read) - In this way we maintain the same KPI presentation logic as in ERP.
Inputs: As for VF44 input. Additional Input fields required such as Sales Org, Product Category, Material.
Outputs: As for VF44 Output. In addition for both outputs we would require output by Sales Org, Product Category, Material and Employee Responsible.
Thank you,
Claus

SD Revenue Recognition Related Question

Hello Gurus,
We are using SD revenue recognition. Business wants to switch unbilled receivables account. I want to understand the impact of doing it on existing sales documents and how SAP will affect existing entries in RR tables.
Any help would be helpful.
Thanks,
Pankaj Gupta

Hi,
What type of RR you are using. Changing unbilled account is generally not suggested for Time based RR.

Service-related revenue recognition

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