cancel
Showing results for 
Search instead for 
Did you mean: 

How to configure the following scenario?

Former Member
0 Kudos

I have a following requirement:

I am selling an equipment to a customer and the delivery has taken place in Jan 2008. However as per the requirement I can recognize the revenue only in after installation which will be in March 2008. However I will be invoicing the customer, but the revenue will be recognized only after completing the installation. This is supported by RR, but I would like to know how to configure? Appreciate your help.

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi

If you want to activate RR then it is suggested that you log a call with SAP with your licence number and other details.

Then SAP will send you an application form. You need to fill in this form and then SAP will suggest the modus operandi for activating RR.

There are some people who are getting the SAP note released to customer and following the procedures. In this case if there are any inconsistencies SAP will not support. And one more issue is that once you activate RR you cannot reverse the same.

SAP is ready to validate free of cost the RR activation health check up of your system. SAP will do it in all your systems. These are my views from my experience. However you can check the RR relevant notes and proceed.

Hope this helps.

Kind Regards

Chakradhar

Former Member
0 Kudos

Hi

I have already gone thorugh this procedure an activated RR. Though I am getting some inputs none of the answers have provided me any solution. Hope some one will give me some idea about how to go about this?

Former Member
0 Kudos

Hi,

Your scenario is for service industry involving selling of equipments first followed by installation of the same and services later on. The installation of the equipment is the triggering point for recognising the revenue and not the sale of equipment. Looks like a typical telecom scenario.

My suggestions are as below:

1) if possible, discuss this with your finance business team and move away from this scenario of revenue recognition. This scenario takes more efforts and provides less benefits. You not only need to deferr the revenue but also the cost and SAP does not support 1 to 1 mapping of the invoice for deferring the cost. (As per the matching concept in accounting, revenue and cost should be mapped in proper buckets so that the accurate margins can be calculated). If the installed base is required for some statutory reporting, you can generate that seperately from SAP by maintaining the install base.

I know this is very tough change management activity to make happen but this really has long term fruits attached to it as it simplifies your business processes.

2) Try this on your sandbox system. Use revenue recognition type as B - Service related revenue recognition. Apply a deferred account in VKOA settings for your ERL key or the revenue account key you are using. Now create the order and process it through delivery and billing. The accounting entry should post to deferred account. Run VF44 for the billing document and recognise the revenue.

This process helps you in doing the recognitoin but the only catch here is that there is no triggering point. You need to control the running of VF44 manually by generating a seperate report which can tell you which billing document to recognize from deferred account and when. If you would like to have the installation date as triggering point, then you would have to modify the Standard SAP to have some user exits placed in the revenue recognition functionality to make it happen. This i would only suggest you if you have good hands on SAP revrec both functionaly and technicaly.

I know that my answer is not going to give you a easy fix for your problem but that is the best way to go without making much of the changes to standard SAP. Feel free to contact me back in case of any questions at my email address kapilksharma@gmail.com. If you can send me your phone number then we can have a small call where we can have more detailed discussions.

Thanks

Kapil Sharma

Answers (4)

Answers (4)

Former Member
0 Kudos

Hi,

Is this scenario is regular with your client? If yes, do as follows.

Set billing block in sales order type, so that you can not bill the customer until you want. Remove the block whenever you want to create an invoice and create it.

You can have proforma invoice from delivery document.

Or

If you want to create invoice and not to recognize the revenue until it was not installed, maintain a posting block in billing doc, whenever you want to recognize the revenue or you want to transfer values into FI remove the posting bock and manually transfer it to FI.

Hope this will help you. Reward if helps

Venkat Cheedalla

Former Member
0 Kudos

hhmmm, interesting.

you learn something new everyday.

if i could award points, i'd award it to the others as well.

thanks, guys.

Former Member
0 Kudos

hello, friend.

not really an expert, but read something about this. you could try IMG > SD > BASIC FUNCTIONS > ACCOUNT ASSIGNMENT/COSTING > REVENUE RECOGNITION > Set Revenue Recognition for Item Categories.

Select an item category and you will see settings, as follow:

1. revenue recognition

2. acc period start

3. revenue dist

4. revenue event

perhaps you need to coordinate with a FICO consultant for other settings.

regards.

Former Member
0 Kudos

hi,

while you are creating the order there you put the billing date which ever you require. it would at GOTO --> HEADER --> BILLING --> Billingdate.

i think it may help you.

regards

rp s