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How to Revenue Recognition in SAP Business ByDesign (ByD)

Aug 17, 2017 at 05:13 PM


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Hi Experts,

We have requirement from client relating to Revenue Recognition, please find the below scenario.

Ex: Student registered and joined for a course and fee for the course is USD1500 and duration is 3 months. As per the current business process of client, they would like to consider USD500 for each month as revenue instead of USD1500.

Accounting Entry:

1) Student registered on 15th July

Debit Customer (Student) Account USD1500

Credit Deferred Revenue Account USD1500

2) Course started on 20th July and paid partial amount, let say USD800

Debit Bank Account USD800

Credit Customer Account USD800

3) Month end, When i run revenue recognition run, system should calculate the revenue for 11 days as course started on 20th July, Accounting entry would be

Debit Deferred Revenue Account USD183

Credit Revenue Account USD183

Please help me with procedure


PJP Reddy.

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1 Answer

Alexandre Colombo
Aug 21, 2017 at 07:51 PM

Hi PJP Reddy,

Just for brainstorming, for point 1, once you have a sales order with project and and create a customer invoice for that item, the system posts the JE with debit in Receivables account and credit in Deffere Net Value. See the help document "Customer Invoices with Revenue Deferral (Account Determination)".

This invoice once posted becomes an Open item in the customer account monitor. Here, you could make a partial payment of this open item. This partial payment credits Receivables and debits Cash In Transit account (bank ). The debit to the bank account would happen upon bank statement posting.

As for the revenue recognition part, that would depend on the sales order's item type (Product Sales, Project Sales, product - delivery based, service - fixed price) etc. See help document "Revenue Recognition" and the refereced documents. I assume that in this part you would need to check and test the methods/types that best suit your requriements.


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