Revenue Recognition

Process Flow

1. Create a contract and an order with reference to the contract.
2. Create the delivery and post the goods issue.
3. Post the estimated revenue to the special account for unbilled receivables.

To do this, choose Logistics ® Sales and Distribution ® Shipping and Transportation ® Billing ® Revenue Recognition ® Edit Revenue List (transaction VF44). Here, enter the sales document number and sold-to party.

4. The system carries out a new pricing determination based on the latest market price.
5. Create the invoice with the new pricing information.
6. The system reverses the account for "unbilled receivables".
7. The system posts the accrued revenue to the revenue account in accounting.

you require both FI and SD Consultants for this purpose.Though account assignment has to be done by SD consultant.

With this feature company can come to know the revenue for a particular period and can use it for reporting purpose.

In revenue recog. you can create your billing documents and they will be passed to accounting.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 differed acc to sales revenue account.

Configuration part includes the setting of revenue recog. in item category by following the path sd---basic functions----account assnmnt/costing--revenue 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 reconciliation 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.