Revenue Recognition

[Former Member]

Hi Everybody,

We have a scenario in which the customer will have to pay the material net value in Partial. Say if a material has a net value of $600,000, it will be splitted partially like 150000, 200000, and 250000 respectively. When we are billing the customer for the first two payments, it should not affect the revenue. It should go to the deferred revenues and once the final settlement is made and the material is shipped, the revenue should be recognized.

Without the activation of Revenue Recognition, how can we able to achieve this?

Advance thanks for the incoming suggestions.

Srinivasan K

[ajitsingh6]

Dear,

You can this by creating Profarma invoice for these two first and then once you want it to hit Revenue Account

you can create the Billing document as desired.

Regards

Ajit K Singh

[Former Member]

Hi,

Why dont you use billing plan for the same. You can create a billing plan and distribute the amount to be paid on the percentage basis (like 25%, 50%, 25%). When you bill the same, it can be moved to a deferred account. Finally do a revenue recognition and you will have achieved the desired results. Hope this helps.

Thanks

Mukund S

[Former Member]

Hi Guys,

Thanks for the suggestion. But I already did that through mile stone billing and the only thing we don't want to activate the revenue recognition and we cannot create the proforma invoices since it will not hit the Accounting. Is there any other way to achieve this without the revenue recognition?

Srinivasan K

[Former Member]

Hi,

a. In a sales order can you have 3 line items of the same material which will split the total value. You need to key in the pricing manually though (like for example 15K, 25K, 20K).

b. Put an billing block on the Sales order (you can create a new billing block and assign it to only the Regular invoice and not the Proforma Invoice).

c. Create the Proforma invoice with reference to the sales order for only the first two line items.

d. When all the other processes are done, you can remove the billing block for the sales order and the bill the customer.

By this the revenues a/c are not hit and the revenue recognition is also not activated.

PS: This above explanation is under the assumption that

i. You can key in the manual prices in the sales order

ii. You will have only one materail in the sales order for which the price has to be split.

Hope this helps.

Thanks

Mukund S