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Migration of open sales order, earned revenue differs from invoiced amount

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Hello,

we are selling fixed-price services project-based, PBFX.

We need to migrate some open sales orders for which we have not been able to identify a solution.

Let's say we have SO 1-10 of type PBFX.

When the SO was created, its original value was 1000 EUR, unit of measure was EA (each). the associated planned cost was 800 EUR At the cutover date, the earned revenue is 200/800 * 1000= 250 the invoiced amount is 500 In ByD, we need to realize the outstanding 750 EUR revenue and the planned cost will be 600 EUR Now, if we create a SO in ByD UI or we migrate it with the above values, ByD will want to invoice 750 EUR, which is not correct. If we migrate SO 1-10 as the outstanding amount to be invoiced, 500 EUR, the ByD revenue amount will not be correct. Do you have any suggestions on how this should be migrated? Then, we have a situation where the invoiced amount is lower than the earned revenue. Let's say we have SO 2-10 PBFX. The original value was 2000 EUR The earned revenue at the cutover date is 1000 EUR The invoiced amount is 600 EUR Now, if we migrate the SO 2-10 for the outstanding revenue to be realized, we will not be able to invoice the customer 1400 EUR If we migrate the SO 2-10 for the outstanding amount to be invoiced, we won't have the correct revenue in ByD.

Do you have any suggestions on how this should be migrated?

Thank you for your help!

Sergio

Accepted Solutions (1)

Accepted Solutions (1)

caroline_lost
Advisor
Advisor

Hi Sergio,

if you work with fix-price sales order items you could migrate the original quantity and amount and then, in terms of revenue recognition work with manual journal entry vouchers (MJEV) for sales documents with screen variant 634-manual write up/down. When using this screen variant the respective sales order items must use an accrual method.

You can then post the amounts to G/L accounts of type Other Assets to produce costs of sales for the project/sales order item or

to Other Liabilities to produce revenue for the project/sales order item.

On the finance/ cost and revenue side these postings will be regarded as project COGs and revenue.

However, in CRM/Customer invoicing these postings do not update the open amount to be invoiced.

You need to adjust the amount to be invoiced manually in the project invoice request and then complete the sales order item for invoicing once the full amount is invoiced.

Example: Sales Order Item 1-10.

Quantity: 1 ea

Net amount: 1000 LC

Invoiced amount: 500,00 LC

Planned cost: 800,00 LC

POC: 25%

Realised cost: 200,00 LC

Revenue to be realised: 250,00 LC

Step 1:

Migrate Sales Order with Net value 1000,00 LC

Assigned accrual method: 108 - Recognize using cost-to-cost project POC

Step 2: Generate Costs:

Create manual JEV of type 00088-Manual JOurnal entry voucher for sales documents

Screen variant: 634-manual write up/down

Post:

Other Asset: Credit: 200,00 LC

Other Asset: Debit: 200,00 LC, project task, SO item 1-10, G/L account (origin).

After the JEV

the incurred cost of the item are 200,00 LC

and the POC of the item is 25%.

Step 3: Generate revenue:

Other Liabilities: Debit: 500,00 LC

Other Liabilities: Credit: 500,00 LC; project tas, SO item 1-10, G/L account (origin).

After the JEV the invoiced revenue of the item is updated to 500,00 LC.

If you now execute the revenue recognition run, the run will

- realise 25% of revenue, i.e. 250,00 LC on the revenue account,

- defer the remaining 250,00 LC on the Deferred Revenue account

- realise 200,00 LC of COGs on the in the first JEV indicated G/L Account (origin).

Step 4: Invoicing:

The complete sales order item net value is open for invoicing, i.e. 1000,00 LC.

However, it is possible to adjust the amount and only invoice the remaining 500,00 LC.

You can then mark the item as finished for invoicing afterwards.

In regards to the second scenario, Sales Order item 2-10 you could proceed as above:

1. generate the costs to produce a 50% POC via a manual JEV.

2. generate revenue of 600,00 LC via a manual JEV.

The revenue recognition run will:

- credit 600,00 LC to the deferred revenue account and debit them again immediately to realise the amount on the revenue account.

The remaining 400,00 LC will be accrued on the Unbilled Receivables account (debit) and credited on the revenue account.

Again, the manual journal entry vouchers will not influence the open amount to be invoice. This needs to be adjusted manually:

In CRM invoice the remaining 1400,00 LC.

An amount of 600,00 LC remains open but you can complete the item for invoicing.

Can you please check these steps in your test system and let us know what you can observe?

Thanks and kind regards,

Caroline

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Hello Caroline

I have been testing concrete scenarios with real numbers and I can confirm that your suggestions worked.

Thank you for supporting

Best regards form Italy 🙂

Sergio

KshamaMehta
Participant
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Hi caroline.lost ,

In your eg:1 how do we do the migration if 200 EUR out of 250 EUR revenue to be realised belong to the previous fiscal year.

SO: 1000

Rev recognized previous fiscal year: 200

Rev recognized till cutover date (Mid Year): 50

Other details remaining same

Kindly assist.

Regards,

Kshama

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