Billing Scenario

[Former Member]

Hi All,

Below is my requirement:

Please suggest me to meet the below requirement in SAP.

Note: I don’t want to configure Revenue Recognition.

My Client will provide the services to their customers for 1 year.

For this contract is done between 2 parties for 1 year validity.

Contract will start from September ‘14 ends at August’15 (between 2 financial years). Services are performed once in every month throughout the year. But customer will pay the total contract amount at a time while initiation of the contract creation. At this time we don’t want to post the total amount in to revenue account. But For that total amount we need to provide the bill to the customer.

Initially That total amount need to post into advance account. Because the services are provided between 2 financial years (Sep’14 to Aug’15). Revenue need to be post for 2 financial years.

So for every month partially need to take the amount from advance account and post the same to  revenue account. Finally advance account need to nullify revenue account need to be increased.

Example:

Contract started on September 2014

Total contract amount 12,00000 Inr paid by the customer on September 2014.

Advance account = 12,00,000 Inr

Revenue posing for Sep’14 - 1,00,000 Inr

                                       Oct’14- 1,00,000 Inr                        

       Nov’14- 1,00,000 Inr

       .

       .

       .July’15- 1,00,000 Inr

        Aug’15- 1,00,000 Inr

Finally Advance account = Zero

Revenue account = 12,00,000 Inr

Thanks in advance

Regards,

Ravi

[Lakshmipathi · Accepted solution]

Just a thought

For the advance amount being paid by the end customer, your client can account the same via FI side and an invoice output can also be generated from FI.  Couple of TCodes like F-22, FB70 are there to generate FI invoice.  So your first requirement of generating an invoice for the advance amount received, is fulfilled.

Now coming to monthly billing, ask your FI team to provide an Accruall G/L Account which should be assigned to an Account Key in VKOA and ensure that this Account Key is assigned in your pricing procedure.  By doing so, as and when, the invoice is generated, customer would not be debited but would be posted to a special G/L Account.  Depending upon the Business discretion, these accrual amounts can be transferred to normal sales account by the finance team.  Not sure, whether this would meet exactly your clients' expectation but you can make an attempt and update here how FI postings are happening.

G. Lakshmipathi

[alex_zheng]

Hi Ravi,

Please take a look at the "SAP ERP SD Revenue Recognition - Best Practices" documentation attched in the SAP note 1172799.

For your requirement, please consider the Time based revenue recognition (type 'A'). You can take a look at the example explained in the process 2 & 3 in the part 1 of this documentation.

Regards,

Alex

[Former Member]

Hi Alex and Ravin,

Thanks for your suggestion.

I know that this can be done by Revenue Recognition.

But we dont have much time to do it.It takes time to request SAP and getting approval.

So please suggest me is there any other possibility to map the same process.

Thanks,

Ravi

[former_member212707]

Ravi,

Why would you not want to leverage the Revenue Recognition functionality for the above case as it looks like it can be achieved by applying the standard VF44 process??

Thanks,
Ravin