UNBILLED RECIEVABLE ACCOUNT- SERVICE CONTRACT WITH REVENUE RECOGNITION

[Former Member]

Hi SAP Gurus,

I want to draw your kind attention towards my problem:

I have created service contract with one year contract and created an invoice for the whole year in advance.

Now in-between i cancelled a contract (after three months) and want to recognised a revenue for the contract period , so i'm creating a revenue recognition for the three months one by one using transaction code-VF44,

first month revenue recogniton is working fine as first month amount is going from deffered account to revenue account

But for second month instead of deffered account ,system is using unbilled recievable account ,which is wrong .

Can anybody tell me why the system is picking unbilled receivable account instead of deffered account in case of second month revenue recogniton.

This may help us:

"When i was cancelling a contract ,at that time i was entering a billing plan end date in billing plan tab at an item level.

and just after entering end date ,system was creating two lines instead of one in billing plan tab and i think because of that extra line system is picking unbilled receivables in second revenue recognition."

Thanks in advance

Ujjawal

Edited by: Ujjawal Singh Karki on Dec 29, 2010 12:05 PM

[Former Member · Accepted solution]

Hi

If I am correct in understanding your issue, you are creating a contract with billing plan for multiple period. In this case, how you have created the billing document for one year in advance.

It seems you have done the billing document for one period and you are doing the RR document for multiple periods and hence the revenue is going to unbilled receivable account for the period for which billing document has not been done.

I am not too sure on the billing types (milestone billing or, periodic billing). Please use a billing type where you will specify only start date and end date of the contract and not the billing plan in contract. Please do the billing and followed by RR.

This may help you.

[Former Member · Accepted solution]

Hi,

Thank you for your reply.

I am doing a contract billing for overall period that is for 12 months (contract is of 12 months).

Just after 3 months i have realized that somehow we have to cancel the contract and we canceled that in 3rd month.

I had created the created a contract with periodic billing plan and for canceling that contract i'm putting contract end date in BILLING PLAN TAB as 31/03/2011 (Let say contract is from 01/01/2011 to 31/12/2011).

Can you/anybody please tell me whether is this the correct way of canceling the contract with periodic billing plan?

As per your analysis:

"It seems you have done the billing document for one period and you are doing the RR document for multiple periods and hence the revenue is going to unbilled receivable account for the period for which billing document has not been done"

As i have billed the customer for 12 months but contract was only for 3 months so i'll create RR for only 3 months and for rest of the period (i.e. 9 months) i'll create credit memo and send it to customer.

"Please use a billing type where you will specify only start date and end date of the contract and not the billing plan in contract"

How can we use billing type for contract start and end date .

I think as soon as i'm changing the dates in billing plan tab system is proposing another line item with different billing dates and that is not getting covered under deferred account that is still unbilled amount .

Waiting for your valuable inputs.

In case of any clarification kindly revert to me.

Thanks,

Ujjawal

Edited by: Ujjawal Singh Karki on Jan 20, 2011 11:10 AM

[Former Member]

Hi

Are you able to solve this issue? If so please let me know the resolution

Thanks