SAP RAR Optimized Contract Management: Customer Invoice Fulfillment Business Use Case
In this blog post I will be focusing on SAP Revenue accounting and reporting (RAR) Event-Based Fulfillment Type – Customer Invoice of Performance Obligation. A performance obligation (POB) can be fulfilled when a specified event happens which is Event-Based Fulfillment. A performance obligation can also be fulfilled over a period of time which is Time-Based Fulfillment.
Performance Obligation Types
The goods or services that are promised in the contract represent a single performance obligation. SAP RAR has performance obligation types, and this represents data which addresses queries on fulfillment type; if it is Time or Event Based, and also specifies about the duration.
On the occurrence of an event, Performance obligations can be fulfilled. They can also be fulfilled over a period of time, starting from the occurrence of an event.
Customer Invoice and Time Based
One can fulfill performance obligations (POBs) upon customer invoice getting generated.
Company enters into a contract with customer (17100002) for 21,000 USD for providing Hi-Tech Equipment (TG13) and Warranty (SM001) of during contract validity from 14th October 2022 to 17th April 2023 (6 months).
|Items||Qty||SO Rate||SSP||Contractual Price||Total SSP||Allocated Amount||Allocation Effect|
Calculation Check Points:
- Allocated Amount = Standalone Selling Price of Item X Complete Contractual Price / (Sum of all Stand-Alone Selling Price (SSP))
- Allocation Effect = Allocated Amount – Contractual Price of Item
Step 1: Value Contract
Step 2: Sales Order
Step 3: Process Revenue Accounting Item’s related to Sales Order (Step 1)
View RAR Contract and Performance Obligations (POB’s) (Step 2)
RAR Contract – Price Allocation (Step 3, 4)
RAR Contract – Revenue Schedule (Before Fulfillment)
Step 4: SD – Outbound Delivery and Post Goods Issue
Step 5: Revenue Accounting Item’s related to PGI
In transaction FARR_RAI_MON or Fiori App Manage Revenue Accounting Items, all fulfillment items related to order will be showcase initially as processable RAI’s. Then all such processable RAI’s are transferred using default sender integration component as SD with RAI class as SD02 with source document item type as SDFI to RAR.
Step 6: Customer Billing
Customer billing is posted.
Step 7: Process Revenue Accounting Item’s related to Fulfillment Process
RAR Contract – Revenue Schedule (After Fulfillment) (Step 5)
Summary of RAR Contract – Revenue Schedule (After Fulfillment)
Service item will be 100% completed by the end of contract period which is 6 months in this case.
We can also see the document flow in Fiori App – Manage Revenue Contracts as below:
This brings us to end of test case of RAR Use Case for Event-Based Fulfillment of Performance Obligations – Customer Invoice.
Hope you find this blog informative and helpful.
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