Here I am back this week with Part-2 of my last blog. Today we will be exploring another new feature as part of “Revenue Recognition” which is “revenue schedule”. So, let’s start with it.
Revenue Schedule: Revenue schedule can be used in scenario where we invoice customer which going to be recognized over the period of time.
Example: Let’s say we create a sales order for AMC subscription which we are going to provide for one year from the time of Invoicing. In this case When we post customer invoice, we cannot recognize complete amount as that month revenue, this should be our deferred revenue and should be recognized on monthly basis.
In this example following accounting entries should be posted:
1. At the time of Customer Invoice:
Customer Debit 1200
Differed Revue Credit 1200
2. Month Revenue Recognition (Every Month for 12 Months):
Differed Revenue Debit 100
Revenue Credit 100
Now, let’s see how we can achieve this:
Pre-Requisites: Please enable Revenue recognition Configuration key as explained in my previous blog. If you have not visited, here is the link:
Step-1: Create Revenue Recognition Journal Name and Map to the revenue recognition parameters
New journal Name: General Ledger > Setup > Journal Name or Revenue recognition > Setup > Journal Name
General Ledger > Ledger Setup > General Ledger Parameters > Revenue Recognition tab > Map journal name
Step-2: Create Revenue schedule
Revenue Recognition > Setup > revenue Schedules
Here we define the name of the schedule, duration and how it will be posted which date of the month
Step-3: Define posting profile for Differed revenue, COGS and Tax
Inventory Management > Setup > Posting
Step-4: Map Revenue schedule to Product
Product Information and Management > released product > select product > Edit > Navigate to Revenue Navigation fast tab > map revenue schedule
Step-5: Create sales order
Sales and Marketing > Order > All sales order > Click New
Step-6: Add lines and Confirm the order
As we can see revenue schedule is appearing after selecting the product
Step-7: Post and View Invoice
Step-8: View Voucher
As we can see, revenue has been posted to the differed revenue instead of actual revenue
Step-9: View un processed revenue schedule
Revenue Recognition > Periodic > Revenue Recognition Schedule > Filter on Posted Invoice
Here we can see all the schedules with status processed and Un processed. This helps to identify every month how much revenue has to be recognized based on posted invoices.
Step-10: Recognize revenue
Revenue Recognition > Periodic > Revenue Recognition Schedule > Filter on Posted Invoice > Click on Create Journal: Specify the date when we want to post the revenue
After Creating journal status changes to Processed and it creates the journal
Note: At this moment if we see “Voucher transaction “button in action pane , it is disabled because it just creates Journal entry which is not posted yet.
Step-11: View Journal and post
Revenue Recognition > Journal Entries > Revenue Recognition journals
Here we have all the processed unposted journals.
Step-12: View Posted voucher for processed revenue schedule
Revenue Recognition > Periodic > Revenue Recognition Schedule > Filter on Posted Invoice > Filter with Status Processed > Click on Voucher transactions and View entry Here we can see:
Differed revenue Debit to Revenue
Credit with that Month Revenue
This was all about Revenue Schedule using Revenue recognition Module. Hope this feature will help your customers.
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I will be back next week with New topic.
Thank you for your Time!!!
Thank You Nikesh Kurhade for helping in writing this blog !!!