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Revenue recognition with cost

Hi Experts

We have a scenario where a rental amount is charged periodically using billing plans, say monthly. The billing is although done at one go. The revenue is recognized monthly using revenue recognition. However, the cost is not captured in realized revenue postings in COPA and stays only in the billing document. We need to show cost proportionately to revenue for correct profit margin.

Has someone come across a similar requirement? Any help would really be appreciated.

Regards

William

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1 Answer

  • avatar image
    Former Member
    Apr 18, 2016 at 11:25 AM

    Dear William,

    Create a document type with reference to MV and if required change the document category to ā€˜Cā€™.

    when you create sales order System will automatically create the Rent for all the Months specified in the Contract duration, Now go to Billing Plan tab in the Sales document header and select the line item for billing and removing the Block ā€œ02ā€ against the line item, Press F3 and Save the Sales Order.

    so that you can have revenue split periodically, hope this will be useful for you.

    Regards

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    • Hi Pavan

      Thanks for the suggestion. This suggestion will work when billing is also done periodically with one bill per month. My requirement is to charge in one billing document and apportion the revenue as well as cost for each month. For revenue, revenue recognition does that adjustment/ booking. We are not able to capture cost alongside the revenue in periodic recognition.

      Regards

      William