How to handle Deferred Revenue

[Former Member]

Does anyone have a recommendation on the best way to handle Deferred Revenue? Need to post an invoice for 1 years contract at the beginning of the year but have it post to deferred revenue and back out 1 months worth to revenue every month.

[K_Pauquet · Accepted solution]

Hi Donald,

please see thisSAP Note:

[Note 1112701 - How to record and identify deferred revenue in SAP?|https://service.sap.com/sap/support/notes/1112701]

All the best,

Kerstin

[Former Member · Accepted solution]

Thanks for taking the time to reply. Unfortunately I should have been more specific in the question I believe. Our problem is that we book a spcific amount at the beginning of the year to deferred revenue for each customer that has a support contract. Each month we need to "recognize" a specific amount of that revenue by crediting revenue and debiting deferred revenue in a Journal Entry. I was looking for a way to automate this entry or if someone knows of an add-on that will handle this better.

Thanks,

Don

[Former Member · Accepted solution]

Hi Donald,

I'm having the exact same problem. Have you worked out a solution?

Thanks

Edward

[Former Member]

HI Donald

Saw your posting on the Forum and was wondering if you ever found a solution? I too have Maintenance and Telecom Invoices issued for 1/4, half year and annual periods. Currently using Spreadsheets to generate a journal to account for movement on Deferred Income for all invoices, not individually.

[Former Member]

Hi,

We are rolling out an add-on by Navigator for deferred revenue. You can also visit EcoHub to see if there are any other similar add-ons or contact your SBO consultant.

Be sure to thoroughly test trial versions before purchasing to make sure the add-on meets your needs. I've seen bugs/hiccups with some add-ons. Key thing is that the functionality is there for business needs.

Heather

[srinivas_munugati]

Hi,

You can use Accrual Engine for such scenarios - I hope you can explore that.

Thanks,

[Former Member]

have you tried thinking about using Billing Plan like periodic billing etc

[former_member201155]

Odd, it seems that the question is not answered but the post is marked as answered?

We have a scenario where the client requires Deferred Revenue, and it can be resolved by doing a JE (or AR Invoice) first to the Customer BP code. If you're using a service invoice, post the revenue GL account code as the Deferred Revenue.

Commonly an AR Invoice will post:

Debit Customer ABC $100

Credit Sales Revenue $100

If your case, maybe it would be:

Debit Customer ABC $100

Credit Deferred Sales Revenue $100

You can then set up a recurring posting JE, to apportion out how much you wish to recognise as actual revenue. Treat the "Deferred Sales Revenue" as a control account where once all the revenue has been recognised it should always show up as 0 (zero) balance.

[Former Member]

Don,

Can you not just use Recurring Posting?

Financials>Recurring Postings

Kind Regards,

Ben