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Revenue Recognition Based on Consumption

Oct 12, 2016 at 04:28 AM

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M R

Hello

I am posting the question again as the earlier thread was archived.

We have a reqmt where a contract with x qty to be created and billed posting to customer AR and deferred revenue. Now the sales order will be created for 1 qty. Many orders will be created with ref to contract till all X is consumed. We need to bill this sales order and post the revenue from deferred to revenue account.

Can some one let me know if this is even possible with rev rec or we have to handle this with G/L accounts, problem with G/L account would be to not post the follow on sales order to customer. I checked various SAP docs but only option I see is using quantity contract to keep track of qty consumed and call off orders but not sure if it will work in this scenario.

Can some one help in this

Thanks

Manish

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2 Answers

G Lakshmipathi
Oct 12, 2016 at 12:44 PM
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You have not explained how currently, it is handled and what is your current configuration without which, it will not be appropriate to suggest with some assumption.

You have to say

  • how your pricing procedure is set
  • how your VKOA settings are set
  • whether the condition type is set for Accrual
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M R Oct 18, 2016 at 08:38 PM
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Hi,

Sorry for the late response as I did not get notification that someone did reply to the thread.

This is a new process we are working on where we are selling a pack of goods, pack could be qty 10 of lets say digital music. The customer will buy a pack and we create a contract for 1 yr duration bill it Dr Customer and Cr Def Revenue. Now over the course of 1 yr customer can download the music and once it is done we will create a sales order wrt contract and need to recognize the revenue ie DR Def rev and Cr Revenue. The release orders will be created max for 1 qty and if more than 1 download happens in a day each item will have its own release sales order.

I thought I can use revenue recg cat D with customer specific event and once the release order for 1 qty comes we can recognize the revenue, but with this approach the event will recognize the revenue for all qty 10 not for 1 qty.

I am looking for a rev rec solution where I can recognize only the desired revenue for 1 qty not whole, so I reached out to you folks.

Hope anyone can provide me a solution to this.

Thanks

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