Recognition of costs in deferred revenue scenario

[Former Member]

Hi

I am working as a consultant for a company that sells software licenses as a value added seller for other vendors.

As the licenses carry the license key as well as maintenance throughout the year, the revenue will be recognized with the standard SAP deferred revenue process when creating the invoice based on the billing plan. At the end of each period 1/12 of the deferred revenue will be transferred to "real" revenue accounts.

Problem is that we as well have to recognize the costs for purchasing the license key periodically, parallel to the revenues. Does anybody have an idea how to do that automatically?

Our setup currently is that we have an SD contract that automatically creates a purchase requisition. This requisition is used to create a purchase order with account assignment category E. Then we post a goods receipt on valuated sales order stock. This posting will be "inventory" against "unvouchered receipts" in FI (both are balance sheet accounts). Then the goods issue against the SD contract will be posted that creates another FI posting ("inventory" against "prepaid expenses" - both balance sheet accounts). The amount (cost) on the "prepaid expense" account should now be settled to the P&L account "SW expense".

The vendor invoice will be "vendor" against "unvouchered receipts" and the sales invoice will be "customer" against "deferred revenue" (all balance sheet accounts).

As mentioned above the deferred revenue will be posted periodically to the P&L account "yearly revenue" and the goal is to handle the cost the same way (as automatic as possible). The use of deferred revenue functionality is not a must. If our problem could be solved with another functionality, we are willing to change this part of the setup.

I appreciate your reply

Thanks a lot in advance

Thomas

Anybody has an idea? At least a hint would be helpful. Many thanks.

Edited by: Thomas Herrmann on Aug 6, 2008 6:03 PM

[Former Member]

Hi,

unfortunately I still did not find a way to handle that.

Any new ideas?

Thanks a lot

[ravichandran_iyer]

Hi Thomas,

Were you able to do this? If so, how? I'm facing an exactly similar situation here. Any help would be appreciated.

Ravi.

[Former Member]

Check if 'Invoicing Plan' meets your requirement

Materials Management>Purchasing>Purchase order-->Invoicing plan

[former_member588240]

Thomas,

I presume that your client has activated 'Revenue Recognition' component in SAP.

If your client has already activated the RR component, they may be aware that the activation is unreversible.

Recognition of costs in a deferred revenue scenario requires some customization effort but definitely do-able. It is not falling within standard SAP.

I worked on scope of one such project but it did not happen unfortunately.

Can you please post your regular updates in this forum?

All the best.

Thanks

PS: I am not an employee of SAP AG and by answering questions, I am not getting any monetary benefits anywhere. I am answering questions here in my spare time for recognition and the points awarded, which gives me a sense of self-satisfaction. Awarding points is also a way of saying thanks and it will encourage me to answer more questions and share my knowledge and experience