Revenue Recognition Part-2 (Revenue Schedule) in Microsoft Dynamics 365 Finance and Supply chain management

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.

Please do Like, share with your friend and network and give your feedback!!!

I will be back next week with New topic.

Thank you for your Time!!!

Thank You Nikesh Kurhade for helping in writing this blog !!!

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