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SAP RAR Optimized Contract Management: Acceptance Date Manual Fulfillment Business Use Case
In this blog post I will be focusing on SAP Revenue accounting and reporting (RAR) Event-Based Fulfillment Type – Acceptance Date of Performance Obligations. A performance obligation (POB) can be fulfilled when a specified event happens which is Event-Based Fulfillment. A performance obligation can be fulfilled over a period of time which is Time-Based Fulfillment. Manual fulfillment occurs when an event is manually updated. For example, when a customer confirms a delivery has arrived, and the acceptance date is maintained as the fulfillment event in the system.
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.
Fulfillment Event Types
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.
How the Acceptance Date Process Is Integrated in Sales and Distribution with Revenue Accounting?
- The revenue contract is created based on sales order.
- Goods issue and creation of billing document are generated. The cost of goods sold (COGS) is posted in the operational system, based on goods issue. The COGS is then corrected in Revenue Accounting.
- The acceptance date is entered in the sales order. When the sales order is saved, a fulfillment event is triggered. Revenue Accounting generates revenue and cost recognition postings using the order quantity as the fulfillment quantity and the acceptance date as the fulfillment event date.
Use Case
Company enters into a contract with customer (17100005) for 30,000 USD for providing Hi-Tech Equipment (TG10) together with Consumable Spare Parts (TG12) and Warranty (SM001) of during contract validity from 1st October 2022 to 31st January 2023 (4 months).
Items | Qty | SO Rate | SSP | Contractual Price | Total SSP | Allocated Amount | Allocation Effect |
TG10 | 1 | 20,000 | 15,000 | 20,000 | 15,000 | 20,220.59 | 220.59 |
TG12 | 3 | 500 | 340 | 1,500 | 1,020 | 1,375.00 | (125.00) |
SM0001 | 1 | 500 | 300 | 500 | 300 | 404.41 | (95.59) |
Total | 22,000 | 16,320 | 22,000 | 0 |
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)
For many entities, Step 1 will be straight forward; the key point is to determine when a contract exists. Using Tcode FARR_RAI_MON or Fiori App Manage Revenue Accounting Items, all sales order items 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 SD01 with source document item type as SDOI to RAR.
View RAR Contract and Performance Obligations (POB’s) (Step 2)
RAR Contract – Price Allocation (Step 3, 4)
Step 4: SD – Outbound Delivery and Post Goods Issue
Step 5: Revenue Accounting Item’s related to PGI
Step 6: Acceptance Date Update
Step 7: Process Revenue Accounting Item’s related to Fulfillment
RAR Contract – Revenue Schedule (After Fulfillment) (Step 5)
Step 8: Customer Billing
Step 9: Process Revenue Accounting Item’s related to Billing
Summary of RAR Contract – Revenue Schedule (After Fulfillment)
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 – Acceptance Date.
Hope you find this blog informative and helpful.
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Thanks,
Jitakshi