Revenue Adjustments Driven From Invoice Changes for an As Billed Revenue Plan

Automatically mark transactions for revenue adjustment processing when revenue is previously recognized on an as-billed basis and on canceled or credited invoices acceptance in Receivables. Create revenue reversal distributions and accounting entries the next time the project accountant generates revenue for the applicable contract. Benefits include improved efficiency and more accurate and timely revenue reporting.

Worked Example

Let's look at how as-billed revenue is adjusted when the corresponding invoice is canceled.

When using as-billed revenue methods, project costs or billing events are only eligible for revenue recognition when they are included on an invoice that is in an 'Accepted' status (that is, the invoice has been transferred to Receivables and has been successfully processed by the Confirm Invoice Acceptance Status in Receivables process).

Let's assume that a user has canceled an invoice which contains transactions for which as-billed revenue has been recognized. When the credit invoice resulting from the invoice cancelation is in an 'Accepted' status, the Revenue Status on the associated project costs or billing events is updated to 'Pending adjustment', as illustrated by the screenshots below:

Revenue Status on Project Costs

Revenue Status on Project Costs

Adjustment History on Project Costs

Project Costs Adjustment HistoryRevenue Status and Adjustment History on Billing Events

Revenue Status and Adjustment History on Billing Events.

Subsequent runs of the Generate Revenue process for the project contract will create reversal revenue distributions for the adjusted project costs or billing events. The project costs or billing events will then be eligible for revenue recognition when they are rebilled.

Business benefits include:

  • Improved efficiency and timeliness of revenue reporting by eliminating the need to manually adjust as-billed revenue when invoices are canceled (either through the creation of negative revenue events, or adjusting project cost or billing events associated with the canceled invoice).

Steps to Enable

Use the Opt In UI to enable this feature. For instructions, refer to the Optional Uptake of New Features section of this document.

Offering: Project Financial Management  No Longer Optional From: Update 26B

Tips And Considerations

  • Before enabling this feature, you need to disable any custom orchestration solution that adjusts as-billed revenue when invoices are canceled.
  • The below adjustment types are not available to users performing adjustments on project costs, either through the UI or using the Project Costs REST API:
    • Revenue adjustment on canceled invoice acceptance
    • Intercompany revenue adjustment on canceled invoice acceptance

Access Requirements

No new access requirements.