SAP RAR Optimized Contract Management: Proof of Delivery Fulfillment Business Use Case
In this blog post I will be focusing on SAP Revenue accounting and reporting (RAR) Event-Based Fulfillment Type – Proof of Delivery of Performance Obligation. 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.
Performance Obligation Types
IMG Path – Financial Accounting > Revenue Accounting > Revenue Accounting Contracts > Define Performance Obligation Types
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.
Proof of Delivery and Time Based
One can fulfill performance obligations (POBs) once proof of delivery gets generated.
Time-based fulfillments for performance obligations involve subscriptions, for example contracts, where services are provided on a regular basis for the duration of the contract.
Company enters into a contract with customer (17100005) for 30,000 USD for providing Hi-Tech Equipment (TG14) together with Consumable Spare Parts (TG12) and Warranty (SM001) of during contract validity from 1st September 2022 to 28th February 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)
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 Delivery
Step 6: Proof of Delivery
RAR Contract – Revenue Schedule (After Fulfillment) (Step 5)
Step 8: Customer Billing
Step 9: Process Revenue Accounting Item’s related to Billing
In transaction FARR_RAI_MON or Fiori App Manage Revenue Accounting Items, All Invoice Items related to billing 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 SD03 with source document item type as SDII to RAR.
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.
This brings us to end of test case of RAR Use Case for Event-Based Fulfillment of Performance Obligations – Proof of Delivery.
Hope you find this blog informative and helpful.
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