on 07-10-2007 3:08 PM
Hi,
Can you please guide how to map the following scenario
I have Business Scenario in Milestone Billing.
The Milestone terms are assigned in CJ20N and the same is copies to
sales order. The Milestone terms defined in the Project are
50% Advance Payment
40% Agaisnt Supply (Treating this also as advance)
10% At the time of Installation.(Treat this also as advance)
50% Revenue Realisation
50% Revenue Realisation
Order quantity is 100RMT
Order Value 10000
The definition of the each milestone is as follows -
Advance Payment: This Milestone raised at the time of booking of sales
order for Advance Payment. Unless advance is receivd orders are not
execute in the business. It means 50% of 10000 = 5000
40% Agaisnt Supply : This Milestone is raised based on supply of
material to the customer. It means as of Milestone Billing Date if
material dispatched is 20MT then the Milestone Billing Booked in the
system is 10000*40% *20/100= 800 (treat this also as advance payment
and client called it as Running Bill) and the same way book the billing
in the system upto completion of 100RMT.
At the time of Installation: This Milestone is raised when the
Installation process is starts. It mean example, if finish the
Installation of 10RMT, then the Milestone Billing is raised as per
below formula - 1000010%10/100 =100 (Treat this also as Advance
Payment and call it as Running Bill).
Actual revenue is booked in the system, once receive the completion
certificate from the client.
As of now in the system, only accept the value base or percentage base
milestones in the system. This type of above scenario how to map in
the system, can please propose a solution.
Kindly help me
Regards
Goutham
hi Goutham,
you need to configure your item categories for revenue recognition based on milestones. Thus, what happens then is you are separating revenues and billing. You can continue billing your customer for whatever milestones you have 50/40/10%, and the revenue can be recognized on the completion of the final milestone.
For customizing revenue recognition type on item category level go to
Sales and Distribution -> Basic Functions -> Account assignment / Costing ->
Revenue Recognition, Or via transaction: OVEP.
Set Revenue recoginition as Category A timebased revenue recognition
and Accrual period start as B -proposal based on billing plan start date
in a milestone billing plan, the billing date of the first milestone is then taken as accrual start date.
You can work on the latest version of the Revenue Recognition Best Practices Guide. The link can be found in note 779365.
Thanks
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
User | Count |
---|---|
89 | |
7 | |
6 | |
3 | |
3 | |
3 | |
3 | |
3 | |
3 | |
3 |
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.