REVENUE RECOGNITION FOR SALE ORDER BASED ON ACCRUAL METHOD (Part-1)
This blog starts by providing a comprehensive understanding of revenue recognition runs that recognize revenue for Sales Order based on the Accrual Method assigned to them.
Understand the concept of Revenue Recognition for Sale Order Based on Accrual Method.
Amounts received from customers could or might not be thought of as accomplished revenue recognized on the standing of delivery/legal transfer of title to the product or service. Revenue is recognized once accomplished or realizable is attained, usually when goods transferred or services rendered
So, we will say that Revenue recognition is that the method of assignment sales revenue to the periods during which it absolutely was accomplished and attained. the price of sales and any revenue deductions for returns related to the revenue got to be allotted to an equivalent accounting period because the revenue itself.
Accrual methods: they’re mechanically allotted to sales order items; customers return items and customer contract items supported the assignment rules per business configuration. If you would like the system to use completely different accumulation strategies, you’ll assign them during view.
Sales Order Processing
The sales order method involves making sales orders for product or services consistent with specific terms with concerned conditions. The sales order is typically created by a sales worker, and might be generated out of a sales quote, a sales contract, or a chance. If services square measure required to meet the sales order, service things will be other. A service request will be created directly from the order if needed.
Navigate to Sales Order Work Center > Sales Order View > Click on Copy tab > Expand Submit tab > Click on Release to Service Execution > Note Down the Services Execution ID
Process Involves in Accrual Method:
Navigate to Cost and Revenue Work Center > Sales Document Items View > Select the Sales Order that Created in Previous Step > Expand Reassign tab > Click on Accrual Method > A tab opens select Accrual Method “Recognize at Point of Delivery” > Click Ok
Process Involves in Revenue Recognition:
Navigate to Cost and Revenue Work Center > Sales Document Items View > Expand the Revenue Recognition tab > Click on Execute Revenue Recognition > A box opens select Operational Posting in the field of Closing Step > Uncheck the test run box > Click Ok
I have tried to explain the process flow of Revenue recognition for sales order based on Accrual Method in simple terms. I hope it would be helpful for those who want to understand the basic process of ‘Revenue recognition for Sales Order based on Accrual Method’ in SAP Business ByDesign.
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