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Revenue Recognition Processing

SAP Best Practices for Software Providers

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Scenario Overview 1

Purpose

Revenue Recognition Process involves recognizing revenue independent

of the billing process. Based on the revenue recognition rules, and the

sales, delivery, billing information, the system proposes the amount and

associated G/L accounts of the revenue to be recognized so the correct

financial postings are made upon its execution..

Key process flows covered

Revenue Recognition Overview

Revenue Recognition Due List

Batch Processing

Purpose and Benefits:

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SAP 2008 / Page 3

Scenario Overview 2

Required

EhP3 for SAP ECC 6.0

Company roles involved in process flows

Revenue Manager

SAPApplications Required:

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Scenario Overview 3

This process involves recognizing revenue independent of the billing process.During the sales process, items are identified as relevant for revenuerecognition. These items populate the revenue recognition tables, and aremade available for subsequent revenue recognition.

An overview report can be run to view the status of each document item andprovide information such as:

Total value Amount recognized

Amount invoiced

Amount not recognized

Amount not invoiced

Drill-down capabilities also provide visibility into the billing and revenuerecognition documents.. The revenue recognition due list allows selectionof all the items that are available to be recognized for a certain period.

When the due list is run, the system automatically makes the correctrevenue postings, from deferred revenue to revenue or from revenue tounbilled receivables.

Generally revenue recognition is run as an automatic batch process, and aspart of the month end closing. This scenario shows how the process canbe run manually either for testing / trouble shooting.

Detailed ProcessDescription:

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Process Flow DiagramRevenue Recognition Processing (474)

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Legend

Symbol Description Usage

Comments

Band: Identifies a user role, such as AccountsPayable Clerk or Sales Representative. This band

can also identify an organization unit or group,

rather than a specific role.

The other process flow symbols in this table go into

these rows. You have as many rows as required to

cover all of the roles in the scenario.

Role bandcontains tasks

common to that

role.

External Events: Contains events that start or end the

scenario, or influence the course of events in the

scenario.

Flow line (solid):Line indicates the normal sequence

of steps and direction of flow in the scenario.

Flow line (dashed):Line indicates flow to infrequently-

used or conditional tasks in a scenario. Line can

also lead to documents involved in the process flow.

Connects twotasks in ascenarioprocess or anon-step event

Business Activity / Event:Identifies an action thateither leads into or out of the scenario, or an outsideProcess that happens during the scenario

Does notcorrespond to atask step in thedocument

Unit Process: Identifies a task that is covered in astep-by-step manner in the scenario

Corresponds toa task step inthe document

Process Reference: If the scenario references anotherscenario in total, put the scenario number and name

here.

Corresponds toa task step in

the document

Sub-Process Reference: If the scenario referencesanother scenario in part, put the scenario number,name, and the step numbers from that scenario here

Corresponds toa task step inthe document

Process Decision: Identifies a decision / branchingpoint, signifying a choice to be made by the enduser. Lines represent different choices emergingfrom different parts of the diamond.

Does notusuallycorrespond to atask step in thedocument;Reflects achoice to bemade after stepexecution

Symbol Description Usage Comments

To next / From last Diagram:Leadsto the next / previous page of theDiagram

Flow chart continues on the next /previous page

Hardcopy / Document: Identifies aprinted document, report, or form

Does not correspond to a taskstep in a document; instead, it isused to reflect a documentgenerated by a task step; thisshape does not have any outgoingflow lines

Financial Actuals: Indicates afinancial posting document

Does not correspond to a taskstep in a document; instead, it isused to reflect a document

generated by a task step; thisshape does not have any outgoingflow lines

Budget Planning: Indicates abudget planning document

Does not correspond to a taskstep in a document; instead, it isused to reflect a documentgenerated by a task step; thisshape does not have any outgoingflow lines

Manual Process: Covers a taskthat is manually done

Does not generally correspond toa task step in a document;instead, it is used to reflect a taskthat is manually performed, suchas unloading a truck in thewarehouse, which affects theprocess flow.

Existing Version / Data: This blockcovers data that feeds in from anexternal process

Does not generally correspond toa task step in a document;instead, this shape reflects datacoming from an external source;this step does not have anyincoming flow lines

System Pass / Fail Decision: Thisblock covers an automaticdecision made by the software

Does not generally correspond toa task step in the document;instead it is used to reflect anautomatic decision by the systemthat is made after a step has beenexecuted.

External

to

SAP

BusinessActivity /

Event

Unit Process

ProcessReference

Sub-Process

Reference

Process

Decision

DiagramConnection

Hardcopy /Document

FinancialActuals

BudgetPlanning

ManualProces

s

ExistingVersion /

Data

SystemPass/F

ailDecisio

n